Reserve Bank of India (RBI) Third Quarter Monetary Policy Review 2014 | Banking Sector Awareness / Current Affairs for IBPS Clerks Interviews
The Reserve Bank of India has announced its third quarter monetary policy review on 28th January 2014 (Tuesday). In this review the RBI surprisingly hiked key policy interest rates by 0.25 per cent to tame inflation. According to the experts, this move would make home, automobile and other loans costlier and further dampen industrial growth. This policy clearly communicates that the "price stability" remains the overriding objective of the RBI's monetary policy and the focus has shifted from WPI-based inflation to CPI-based inflation as the nominal anchor of the policy. The Monetary policy review to be undertaken in two months cycle, next monetary policy review of RBI will be on on 1st April 2014. Below are the highlights of RBI's 3rd Quarter Monetary Policy Review for the year 2014.
RBI’s third quarter monetary policy review - Highlights
- The Repo Rate was increased to 8 per cent from 7.75%.
- The Cash Reserve Ration (CRR) kept unchanged at 4%.
- The Reverse Repo rate has been adjusted to 7 %.
- The MSF rate increased by 0.25 %.
- CPI inflation remains high.
- GDP growth to be less than 5 per cent in the current fiscal.
- Growth to improve to 5.5 per cent in 2014-15.
- Current Account Deficit to be below 2.5 per cent this fiscal.
- March-end inflation could exceed 8 per cent
- Rate hike will set economy securely on disinflationary path.
- Growth likely to lose momentum in Q3 of 2013-14.
- Slowdown in economy getting increasingly worrisome.
- Inflation is a tax that is grossly inequitable, falling hardest on the very poor.
- Fiscal and monetary authorities should continue to work for macroeconomic stabilisation.
These reviews are according to Urijit Committee recommendations.
Next monetary policy review will be on April 1st 2014
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