- Calming apprehensions that the new govt may push for cutting down of policy rates, as RBI has held on to its rates until inflation calms down.
- A neutral tone maintained on its stance on the rates and its balancing of risks to achieve the target of 8% CPI by 2015.
- It also promised that if economy stays on this course, no further policy tightening will be required.
- Heeding to the Urjit Patel Committee recommendations, it has drifted away from sector-specific refinance to a more generalised system for providing liquidity.
- Has reduced export credit refinancing for banks from 50% of outstanding export credit to 32%.
- A special term repo facility of 0.25 per cent to compensate for the reduction in liquidity.
- Reduction in statutory liquidity ratio (SLR) by 0.50% to increase credit availability, especially for infrastructure lending.
- The moves seem to be a cautious wait-and-watch approach to the new govt’s policies and commitment to fiscal consolidation and has put the onus on the govt to reduce food prices and control inflation.
- The new budget, together with the monsoon will set stage for the next policy move of RBI.
- Read at:http://www.thehindu.com/todays-paper/tp-opinion/waitandwatch-policy/article6080224.ece