Highlights of 3rd quarter review of Indian Monetary Policy review 2010-2011

Reserve Bank of India’s Third Quarter Review of Monetary Policy
The highlights of monetary policy are as follows:

• Short-term lending (repo) rate raised by 0.25% to 6.5%
• Short-term borrowing (reverse repo) rate up 0.25% to 5.5%
• Hike in policy rates with immediate effect
• FY2011 inflation target raised to 7% from 5.5%
• CRR and bank rate unchanged at 6%
• SLR unchanged at 24%
• FY2011 GDP growth target unchanged at 8.5%
• GDP growth may decline after 2010-2011
• FY2011 current account deficit to be about 3.5% of GDP
• Temporary liquidity easing measures extended till April 8
• Measures aimed at preventing food and fuel prices spilling over to generalised inflation.