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The Reserve Bank of India (RBI) is the central bank of India, and was established on April 1, 1935 in accordance

with the provisions of the Reserve Bank of India Act, 193 ! "ince its inception, it has been head#$artered in %$&bai! Tho$'h ori'inall( privatel( owned, RBI has been f$ll( owned b( the )overn&ent of India since nationali*ation in 19 9! RBI is 'overned b( a central board (headed b( a )overnor) appointed b( the +entral )overn&ent! The c$rrent 'overnor of RBI is ,r!-!.en$'opal Redd( (who s$cceeded ,r! Bi&al /alan on "epte&ber 0, 1223)! RBI has 11 re'ional offices across India! The Reserve Bank of India was set $p on the reco&&endations of the 3ilton -o$n' +o&&ission! The co&&ission s$b&itted its report in the (ear 1910, tho$'h the bank was not set $p for nine (ears! 4n 1 July, 2006, in an atte&pt to enhance the #$alit( of c$sto&er service and stren'then the 'rievance redressal &echanis&, the Reserve Bank of India constit$ted a new depart&ent 5 +$sto&er "ervice ,epart&ent (+",)!

[Main objectives
[Monetary Aut ority

6or&$lates, i&ple&ents and &onitors the &onetar( polic(! 4b7ective8 &aintainin' price stabilit( and ens$rin' ade#$ate flow of credit to prod$ctive sectors! %aintain opti&$& 9i#$idit( in the econo&(!

[Re!ulator and su"ervisor of t e financial syste#


:rescribes broad para&eters of bankin' operations within which the co$ntr(;s bankin' and financial s(ste& f$nctions! 4b7ective8 &aintain p$blic confidence in the s(ste&, protect depositors; interest and provide cost<effective bankin' services to the p$blic! The Bankin' 4&b$ds&an "che&e has been for&$lated b( the Reserve Bank of India (RBI) for effective redressal of co&plaints b( bank c$sto&ers

Mana!er of $%c an!e &ontrol


%ana'es the 6orei'n =>chan'e %ana'e&ent Act, 1999! 4b7ective8 to facilitate e>ternal trade and pa(&ent and pro&ote orderl( develop&ent and &aintenance of forei'n e>chan'e &arket in India!

Issuer of currency

Iss$es and e>chan'es or destro(s c$rrenc( and coins not fit for circ$lation! 4b7ective8the &ain ob7ective is to 'ive the p$blic ade#$ate #$antit( of s$pplies of c$rrenc( notes and coins and in 'ood #$alit(!

and even providin' loan to co&&ercial bank

'evelo"#ental role

:erfor&s a wide ran'e of pro&otional f$nctions to s$pport national ob7ectives!

[Related (unctions

Banker to the )overn&ent8 perfor&s &erchant bankin' f$nction for the central and the state 'overn&ents? also acts as their banker! Banker to banks8 &aintains bankin' acco$nts of all sched$led banks! 4wner and operator of the depositor( (")9) and e>chan'e (@,") for 'overn&ent bonds!

There is now an international consens$s abo$t the need to foc$s the tasks of a central bank $pon central bankin'! RBI is far o$t of to$ch with s$ch a principle, owin' to the sprawlin' &andate described above!

)ara"ore co##ittee
The )ara"ore co##ittee is a co&&ittee set$p b( the Reserve Bank of India $nder the chair&anship of for&er RBI dep$t( 'overnor " " Tarapore to Ala( the road&apA to capital acco$nt convertibilit(! The five<&e&ber co&&ittee reco&&ended a three<(ear ti&efra&e for co&plete convertibilit( b( 1999<1222! In %arch 1220, the 6inance %inister of India, : +hida&bara& said that the +entral 'overn&ent was Awithin strikin' distanceA of i&ple&entin' the co&&ittee;s report!

)rivia

,$rin' :artition, the federal reserve was spilt b( the British Ra7 to aid India and :akistan separatel(! "o&e clai& that :akistan has never 'otten its share till date, which is incorrect! 4n /an$ar( 19th , 19 B :akistan received its share of 50 +rores R$pees b$llion! Apart fro& that, @i*a& of 3(derabad ille'all( transferred state of 3(derabad f$nds to :akistan and :akistan has still not paid the& back! @awab of /$na'arh fled with 3 +rore cash which was 'overn&ent propert(! Chen it looked like British wo$ld help India 'et that &one( back :akistan )ovt on :Ak 'ovt planes kept the &one( and the @awab fled to =$rope with the &one(! 4ne of

the planes ref$ellin' at Beir$t crashed in Ae'ean "ea and &one( was declared lost! This stor( has led to several real life treas$re h$nts in that area!D

&a"ital Account &onvertibility


or +A+ is a &onetar( polic( that centers aro$nd the abilit( to cond$ct transactions of local financial assets into forei'n financial assets freel( and at pre<set, fi>ed &arket rates! It is so&eti&es referred to as Capital Asset Liberation! In la(&an;s ter&s, it is basicall( a polic( that allows the eas( e>chan'e of local c$rrenc( (cash) for forei'n c$rrenc( at low rates! This is so local &erchants can easil( cond$ct transnational b$siness witho$t needin' forei'n c$rrenc( e>chan'es to handle s&all transactions! +A+ is &ostl( a '$ideline to chan'es of ownership in forei'n or do&estic financial assets and liabilities! Tan'entiall(, it covers and e>tends the fra&ework of the creation and li#$idation of clai&s on, or b( the rest of the world, on local asset and c$rrenc( &arkets! +A+ was first coined as a theor( b( the Reserve Bank of India in 199E b( the Tarapore +o&&ittee, in an effort to find fiscal and econo&ic policies that wo$ld enable developin' Third Corld co$ntries transition to 'lobali*ed &arket econo&ies!D1F 3owever, it had been practiced, altho$'h witho$t for&al tho$'ht or or'ani*ation of polic( or restriction, since the ver( earl( 92;s! Article .III of the I%6Gs Articles of A'ree&ent is a'reed b( &ost econo&ists to have been the basis for +A+, altho$'h it notabl( failed to anticipate proble&s with the concept in re'ard to o$tflows of c$rrenc(! 3owever, before the for&ali*ation of +A+, there were proble&s with the theor(! 6ree flow of assets was re#$ired to work in both directions! Altho$'h +A+ freel( enabled invest&ent in the co$ntr(, it also enabled #$ick li#$idation and re&oval of capital assets fro& the co$ntr(, both do&estic and forei'n! It also e>posed do&estic creditors to overseas credit risks, fl$ct$ations in fiscal polic(, and &anip$lation!D3F As a res$lt, there were severe disr$ptions that helped to contrib$te to the =ast Asian crisis of the &id 92;s! In %ala(sia, for e>a&ple, there were heav( losses in overseas invest&ents of at least one bank, in the &a'nit$de of h$ndreds of &illions of dollars! These were not reali*ed and identified $ntil a refor& s(ste& stren'thened re'$lator( and acco$ntin' controls!D F This led to the Tarapore +o&&ittee &eetin' which for&ali*ed +A+ as $tili*in' a &i>t$re of free asset allocation and strin'ent controls

)enets
+A+ has 5 basic state&ents desi'ned as points of action8D5F

All t(pes of li#$id capital assets &$st be able to be e>chan'ed freel(, between an( two nations, with standardi*ed e>chan'e rates! The a&o$nts &$st be a si'nificant a&o$nt (in e>cess of H522,222)!

+apital inflows sho$ld be invested in se&i<li#$id assets, to prevent ch$rnin' and e>cessive o$tflow! Instit$tional investors sho$ld not $se +A+ to &anip$late fiscal polic( or e>chan'e rates! =>cessive inflows and o$tflows sho$ld be b$ffered b( national banks to provide collateral!

[edit* A""lication
In &ost traditional theories of international trade, the reasonin' for capital acco$nt convertibilit( was so that forei'n investors co$ld invest witho$t barriers! :rior to its i&ple&entation, forei'n invest&ent was hindered b( $neven e>chan'e rates d$e to corr$pt officials, local b$siness&en had no convienent wa( to handle lar'e cash transactions, and national banks were disassociated fro& fiscal e>chan'e polic( and inc$rred hi'h costs in s$ppl(in' hard<c$rrenc( loans for those few local co&panies that wished to do b$siness abroad! ,$e to the low e>chan'e rates and lower costs associated with Third Corld nations, this was e>pected to sp$r do&estic capital, which wo$ld lead to welfare 'ains, and in t$rn lead to hi'her ),: 'rowth! The tradeoff for s$ch 'rowth was seen as a lack of s$stainable internal )@: 'rowth and a decrease in do&estic capital invest&ents!D0F Chen +A+ is $sed with the proper restraints, this is e>actl( what happens! The entire o$tso$rcin' &ove&ent with 7obs and factories 'oin' oversees is a direct res$lt of the forei'n invest&ent aspect of +A+! The Tarapore +o&&ittee;s reco&&endation of t(in' li#$id assets to static assets (i!e!, investin' in lon' ter& 'overn&ent bonds, etc) was seen b( &an( econo&ists as directl( responsible for stabili*in' the idea of capital acco$nt liberali*ation!

[edit* &ontroversy
,espite chan'es in wordin' over the (ears, and additional safe'$ards, there is still criticis& of +A+ b( so&e econo&ists! A&erican econo&ists, in partic$lar, find the restriction on inflows to Third Corld co$ntries bein' invested in i&prove&ents as ne'ative, since the( wo$ld rather see s$ch transactions p$t to direct $se in 'rowin' capital!D3FD1F

Dr. Y Venugopal Reddy, Governor, Reserve Bank of India today presented the Third Quarter Review of nnual !tate"ent on #onetary $oli%y for the Year &''()'* . +ighlights Bank Rate, Reverse Repo Rate, Repo Rate and Cash Reserve Ratio (CRR) kept unchanged. The flexibility to conduct overnight or longer term repo including the right to accept or re ect tenders under the li!uidity ad ustment facility ("#$), %holly or partially, is retained. &verall real '() gro%th pro ection for *++,-+. at around ../ per cent is retained. The policy endeavour %ould be to contain inflation close to /.+ per cent in *++,-+. %hile conditioning expectations in the range of 0.+-0./ per cent. 1hile non-food credit has decelerated, gro%th in money supply and aggregate deposits of scheduled commercial banks continue to expand %ell above indicative pro ections. 2igh gro%th in reserve money is driven by large accretion to RB34s net foreign exchange assets. "i!uidity management %ill assume priority in the conduct of monetary policy through appropriate and timely action. Barring the emergence of any adverse and unexpected developments in various sectors of the economy and keeping in vie% the current assessment of the economy including the outlook for gro%th and inflation, the overall stance of monetary policy in the period ahead %ill broadly continue to be5 o To reinforce the emphasis on price stability and %ell-anchored inflation expectations %hile ensuring a monetary and interest rate environment conducive to continuation of the gro%th momentum and orderly conditions in financial markets. To emphasise credit !uality as %ell as credit delivery, in particular, for employment-intensive sectors, %hile pursuing financial inclusion. To monitor the evolving heightened global uncertainties and domestic situation impinging on inflation expectations, financial stability and gro%th momentum in order to respond s%iftly %ith both conventional and unconventional measures, as appropriate. Details (r. 6.7enugopal Reddy, 'overnor today presented the Third 8uarter Revie% of #nnual 9tatement on :onetary )olicy for the year *++,-+.. The Revie% consists of three sections5 3. #ssessment of :acroeconomic and :onetary (evelopments; 33. 9tance of :onetary )olicy; and 333. :onetary :easures. Do"esti% Develop"ents Real '() gro%th moderated to <.= per cent in the first half of *++,-+. from <.< per in the first half of *++>-+,. 3nflation, based on variations in the %holesale price index (1)3) on a year-on-year basis, eased to ?.. per cent as on @anuary =*, *++. from its peak of >.0 per cent at the beginning of the financial year and from >.* per cent a year ago. )rices of primary articles registered a year-on-year increase of ?.< per cent as on @anuary =*, *++. as compared %ith <./ per cent a year ago.

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:anufacturing inflation eased to ?.< per cent as on @anuary =*, *++. from /.. per cent a year ago. The price of the 3ndian basket of international crude has registered a sustained increase during *++,-+. from A9 B >>.0 in #pril-@une, A9 B ,*., in @uly-9eptember, A9 B ./., in &ctober-(ecember *++, to A9 B ...< per barrel as on @anuary */, *++.. inflation based on the consumer price index (C)3) for industrial %orkers (31) declined to /./ per cent on a year-on-year basis in Covember *++, from >.? per cent a year ago. The C)3 for urban non-manual employees (AC:D), agricultural labourers (#") and rural labourers (R") also declined to /.= per cent, /.< per cent and /.> per cent, respectively, in (ecember *++, as compared %ith >.< per cent, ..< per cent and ..? per cent a year ago. #s on @anuary 0, *++. money supply (:?) increased by **.0 per cent on a year-on-year basis %hich %as higher than *+.. per cent a year ago and %ell above the pro ected tra ectory of =,.+-=,./ per cent indicated in the #nnual )olicy 9tatement for *++,-+.. Reserve money increased by ?+.> per cent on a year-on-year basis as on @anuary =., *++. as compared %ith *+.+ per cent a year ago. 3n the current financial year, the gro%th in aggregate deposits of scheduled commercial banks (9CBs), on a year-on-year basis, at Rs.>,++,,>= crore (*/.* per cent) %as higher than that of Rs.0,00,*0= crore (**.< per cent) a year ago. &n a year-on-year basis, non-food credit of 9CBs expanded by Rs.?,.*,=// crore (**.* per cent) as on @anuary 0, *++. on top of the increase of Rs.0,=>,0=. crore (?=.< per cent) a year ago. The year-on-year gro%th in total resource flo% from 9CBs to the commercial sector decelerated to *=., per cent from ?+.= per cent a year ago. Banks4 holdings of 'overnment and other approved securities at *<.= per cent of their net demand and time liabilities (C(T") as on @anuary 0, *++. %as marginally higher than *..> per cent a year ago. The overhang of li!uidity as reflected in the sum of "#$, :99 and the Central 'overnment4s cash balances increased from Rs../,,,+ crore at end-:arch *++, to Rs.*,/.,=., crore on @anuary =,, *++. before declining to Rs.*,?*,.+< crore on @anuary *0, *++.. (uring the third !uarter of *++,-+., money, debt and foreign exchange markets remained generally stable, despite large movements in li!uidity conditions. Rapid gro%th in turnover in the foreign exchange market %as sustained by large surplus conditions in the spot market as average daily turnover increased to A9 B /+.= billion for the !uarter ended (ecember *++, from A9 B *,.> billion in the corresponding !uarter of the previous year.

(uring :arch *++,-@anuary *++., pubic sector banks ()9Bs) that %ere earlier paying higher interest rates on longer term deposits, read usted their interest rates do%n%ards by */-/+ basis points, %hile those offering lo%er deposit rates for similar maturity earlier increased their deposit rates by /+-,/ basis points. (uring :arch *++,-@anuary *++., the benchmark prime lending rates (B)"Rs) of )9Bs increased by */-,/ basis points from a range of =*.*/-=*.,/ per cent to =*./+-=?./+ per cent. The B9D 9ensex increased from =?,+,* at end-:arch *++, to =.,?>* on @anuary */, *++. registering an increase of 0+./ per cent over end-:arch *++,. The gross market borro%ings of the Central 'overnment through dated securities at Rs.=,0,,+++ crore (Rs.=,?+,+++ crore a year ago) during *++,-+. so far (up to @anuary */, *++.) constituted <0.> per cent of the budget estimates (BD) %hile net market borro%ings at Rs.=,+?,+<* crore (Rs.<=,0?* crore a year ago) constituted <0.= per cent of the BD.

,-ternal Develop"ents (uring #pril-Covember *++,, merchandise exports rose by *=.< per cent in A9 dollar terms as compared %ith *>.* per cent in the corresponding period of the previous year. 3mport gro%th %as also lo%er at *>.< per cent as compared %ith *,.0 per cent in the previous year. The merchandise trade deficit %idened to A9 B /*.. billion from A9 B ?../ billion in the previous year. 1hile oil imports recorded a lo%er gro%th of <.. per cent as compared %ith 0*.+ per cent a year ago, non-oil imports increased by ?/.? per cent as compared %ith *=.? per cent a year ago. $oreign exchange reserves increased by A9 B ./., billion during the current financial year so far and stood at A9 B *.0.< billion on @anuary =., *++.. &ver the end-:arch *++, level, the rupee appreciated by <.>= per cent against the A9 dollar, by .../ per cent against the pound sterling and by +.</ per cent against the @apanese yen, but remained unchanged against the euro as on @anuary */, *++..

Glo.al Develop"ents #ccording to the 1orld Dconomic &utlook (1D&) of the 3nternational :onetary $und (3:$) released in &ctober *++,, the forecast for global real '() gro%th on a purchasing po%er parity basis is placed at /.* per cent for *++, as compared %ith /.0 per cent in *++> and is expected to decelerate further to 0.. per cent in *++.. 3n the A9, real '() gro%th is expected to slo% do%n from the fourth !uarter of *++, on%ards as the deepening housing market correction and ongoing financial market turmoil are expected to curb gro%th more severely, although exports could play a mitigating role. 'lobally, inflationary pressures have re-emerged as a key risk to global gro%th. 3nflation pressures have raised concerns in the A9, AE, the euro area and in some of the emerging market economies (D:Ds) such as China, :alaysia, 3ndonesia and Chile. The persistence of high food prices, oil prices sustained at elevated levels and continued high prices of other commodities pose significant inflation risks for the global economy and challenges for monetary policy %orld%ide. The turbulence in the international financial markets since @uly *++,, triggered by defaults in the A9 subprime mortgage market, deepened in subse!uent months. These

unusual developments indicated heightened uncertainties and emerging challenges for the conduct of monetary policy, especially for D:Ds. 1ith the beginning of the turbulence, central banks of advanced economies undertook an increasingly expansive monetary policy course by cutting policy rates (A9 $ederal Reserve) and also supplying financial markets %ith additional li!uidity. 9ome central banks such as the A9 $ederal Reserve, Bank of Dngland and the Bank of Canada have cut policy rates during the third and fourth !uarters of *++, after financial markets %ere significantly affected by turbulence. Central banks of several countries, including the euro area, Ce% Fealand, @apan, Eorea, :alaysia, Thailand and BraGil have not changed their rates in the last !uarter of *++,. The central banks that have tightened their policy rates in recent months include the Reserve Bank of #ustralia, the )eople4s Bank of China, the Banco Central de Chile and Banco de :exico. 9everal central banks confronted %ith volatile and large capital flo%s have employed a variety of measures to manage and stabilise these flo%s %ith a vie% to reducing overheating, currency appreciation and the economyHs vulnerability to sharp reversals of flo%s. # common feature among the policies adopted by most of them is monetary tightening involving either hikes in policy rates or hikes in reserve re!uirements or both. :easures directly aimed at managing capital flo%s are also in evidence in many D:Ds.

/verall ssess"ent Real '() originating in agriculture and allied activities has accelerated in the first half of *++,-+. in comparison %ith #pril-9eptember *++> and subse!uent developments seem to confirm the positive outlook for agriculture. #ssuming that there are no exogenous shocks, either global or domestic, the prospects for the industrial sector over the rest of *++,-+. remain reasonably positive at this uncture. 1hile the prospects for services continue to be favourable at this uncture, uncertainties surrounding the evolution of global developments could affect the outlook. (omestic activity continues to be investment driven, supported by external demand. Building up of supply capacities, both ne% and existing, is strongly under%ay as reflected in the sustained demand for domestic and imported capital goods. Eey indicators point to the persistence of aggregate demand pressures, including into the near-term. 3ndications are getting stronger of upside inflationary risks in the period ahead. (omestic monetary and li!uidity conditions continue to be more expansionary than before and are likely to be amplified by global factors. There %as a large increase in the total overhang of li!uidity over the third !uarter of *++,-+., reflecting the siGeable expansion in primary li!uidity generated by the large accretions to the Reserve BankHs net foreign assets. 3n the foreign exchange market, large inflo%s have imposed persistent up%ard pressures on the exchange rate of the rupee %hich have become accentuated in the %ake of cuts in the A9 $ederal $unds target rate. There has been some improvement in the finances of the Central 'overnment as the gross fiscal deficit has declined indicating that adherence to the $iscal Responsibility and Budget :anagement ($RB:) rules in the current financial year is on track. Consensus forecasts indicate a slo%ing of the global economy in *++, and *++. %ith the A9 subprime crisis, food and crude prices posing the gravest risks. 1hile the dangers of global recession are relatively subdued at the current uncture and consensus expectations seem to support a soft landing, the upside pressures on inflation have become more potent and real than before.

2eadline inflation has trended up in the A9, the euro area, @apan and China. &verall, inflationary pressures have firmed up %ith implications for the outlook for *++.. (evelopments in global financial markets present several issues that need to be monitored carefully in the context of the implications for D:Ds. $irst, corporate credit spreads and those on mortgage-backed securities have %idened since early &ctober as concerns relating to the possibility of prolonged disruption to credit intermediation have deepened. 9econd, the impact of the recent financial market turmoil has been siGeable on banks, particularly internationally active banks on both sides of the #tlantic. Third, the responses of central banks to recent events have demonstrated that ensuring financial stability can, under certain circumstances, assume overriding importance relative to other more explicitly pursued goals. 3n vie% of the evolving global macroeconomic prospects in the near-to-medium term, D:Ds face several challenges. $irst, they face risks from tightening of credit standards in advanced economies. 9econd, dependence on imports and higher energy intensity of output may make D:Ds more exposed to inflation shocks. Third, in the %ake of some macroeconomic and political developments, international financial markets respond differently to the D:Ds. $ourth, the self-correcting mechanisms in financial markets happen to operate far less efficiently in the D:Ds. $ifth, real sector flexibilities may be far less in D:Ds. $inally, the distinction bet%een flexibility and volatility in the context of financial markets in D:Ds has to be based on the preparedness of the markets and the market participants.

!tan%e of #onetary $oli%y The pro ection of overall real '() gro%th in *++,-+. is maintained at around ../ per cent for policy purposes, assuming no further escalation in international crude prices and barring domestic or external shocks. The policy endeavour %ould be to contain inflation close to /.+ per cent in *++,-+. %hile conditioning expectations in the range of 0.+-0./ per cent so that an inflation rate of around ?.+ per cent becomes a medium-term ob ective. The rate of money supply has picked up coincident %ith a ump in the gro%th of reserve money, driven by the accretion to the Reserve BankHs foreign exchange assets. :oderating money supply in alignment %ith the indicative pro ections of =,.+-=,./ per cent set out in the #nnual )olicy 9tatement of #pril *++, may %arrant appropriate responses, given the considerations for ensuring macroeconomic and financial stability going for%ard. 3n vie% of the risks associated %ith international financial developments impacting balance sheets of corporates %ith siGeable external liabilities, banks are urged to revie% large foreign currency exposures and to put in place a system for monitoring such unhedged exposures on a regular basis so as to minimise risks of instability in the financial system under the current highly uncertain conditions. Banks are also urged to carefully monitor corporate activity in terms of treasuryItrading activity and sources of other income to the extent that embedded creditImarket risks pose potential impairment to the !uality of banksH assets. 3n the context of a more open capital account and the siGe of inflo%s currently, public policy preference for a hierarchy of capital flo%s %ith a priority for more stable components could necessitate a more holistic approach, combining sectoral regulations %ith broader measures to enhance the !uality of flo%s and make the source of flo%s transparent. 3n this context, it is critical for public policy to effectively, demonstrably and convincingly indicate commitment to managing capital flo%s consistent %ith macro fundamentals through appropriate and decisive policy actions. The setting of monetary policy in 3ndia has been rendered complex. &n the one hand, the underlying fundamentals of the economy remain strong and resilient and the outlook continues to be positive. #t the same time, %hile there is no visible or immediate threat to

financial stability in 3ndia from global developments, the need for continued but heightened vigilance has increased %ith an emphasis on readiness to take timely, prompt and appropriate measures to mitigate the risks to the extent possible. # disaggregated analysis of supply and demand factors across select sectors %ould enable appropriate public policy responses keeping in vie% the employment intensity of some of these sectors. :onetary policy, per se, can essentially address issues relating to aggregate demand but the associated policies in the financial sector could, to the extent possible, take account of the evolving circumstances as reflected in the disaggregated analysis. 3n vie% of the prevailing li!uidity conditions and the sustained profitability of banks as reflected in net interest margins, there is a need for banks to undertake institutional and procedural changes for enhancing credit delivery to sectors that are employment-intensive. &ver the period ahead, li!uidity management %ill continue to assume priority in the conduct of monetary policy and developments having implications for li!uidity management %ould %arrant appropriate and timely action. The Reserve Bank %ill continue %ith its policy of active demand management of li!uidity through appropriate use of the CRR stipulations and open market operations (&:&) including the :99 and the "#$, using all the policy instruments at its disposal flexibly, as and %hen the situation %arrants. Barring the emergence of any adverse and unexpected developments in various sectors of the economy and keeping in vie% the current assessment of the economy including the outlook for gro%th and inflation, the overall stance of monetary policy in the period ahead %ill broadly continue to be5 o To reinforce the emphasis on price stability and %ell-anchored inflation expectations %hile ensuring a monetary and interest rate environment conducive to continuation of the gro%th momentum and orderly conditions in financial markets. To emphasise credit !uality as %ell as credit delivery, in particular, for employment-intensive sectors, %hile pursuing financial inclusion. To monitor the evolving heightened global uncertainties and domestic situation impinging on inflation expectations, financial stability and gro%th momentum in order to respond s%iftly %ith both conventional and unconventional measures, as appropriate.

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#onetary #easures Bank Rate kept unchanged at >.+ per cent. The reverse repo rate and the repo rate under the "#$ are kept unchanged at >.+ per cent and ,.,/ per cent, respectively. The Reserve Bank retains the option to conduct overnight or longer term repoIreverse repo under the "#$ depending on market conditions and other relevant factors. The Reserve Bank %ill continue to use this flexibility including the right to accept or re ect tender(s) under the "#$, %holly or partially, if deemed fit, so as to make efficient use of the "#$ in daily li!uidity management. CRR kept unchanged at ,./ per cent.

The #nnual )olicy 9tatement for the year *++.-+< %ill be announced on #pril *<, *++..