All key interest rates - bank rate, repo rate and CRR stands unchanged at the earlier levels. This was announced by the RBI Governor, Dr. Y. V Reddy in the Annual policy statement issued today (May 18). However, RBI has removed the soft interest rate stance, which it has been maintaining for the past three years.
Highlights of RBI Annual Policy Statement for the year 2004-05:
Bank Rate kept unchanged at 6 per cent.
Repo Rate untouched at 4.5 per cent.
CRR - no change. Kept at 4.5 per cent
Real GDP growth for 2004-05 has been placed in the range of 6.5 to 7.0 per cent, assuming sustained growth in the industrial sector, normal monsoon and good performance of exports.
The inflation rate in 2004-05, on a point-to-point basis, placed at around 5.0 per cent.
In sum, according to the present assessment, barring the emergence of any adverse and unexpected developments in the various sectors of the economy and assuming that the underlying inflationary situation does not turn adverse, the overall stance of monetary policy for 2004-05 will be:
Provision of adequate liquidity to meet credit growth and support investment and export demand in the economy while keeping a very close watch on the movements in the price level.
2. Consistent with the above, while continuing with the status quo, to pursue an interest rate environment that is conducive to maintaining the momentum of growth and, macroeconomic and price stability.
The overall stance of monetary policy in 2003-04 was:
Provision of adequate liquidity to meet credit growth and support investment demand in the economy while continuing a vigil on movements in the price level.
In line with the above, to continue with the present stance of preference for a soft and flexible interest rate environment within the framework of macroeconomic stability.
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