RBI governor declares Annual Policy Statement for 2006/07

18 Apr '06

2 min read

RBI (Reserve Bank Of India) presents Annual Policy Statement for the year 2006-07 by RBI Governor:

Focus on credit quality and financial market conditions for maintaining macroeconomic, in particular, financial stability.

Monetary and interest rate environment enabling growth momentum consistent with price stability.

Bank Rate, Reverse Repo Rate, Repo Rate and Cash Reserve Ratio kept unchanged.

GDP growth projection for 2006-07 at 7.5-8.0 per cent.

Inflation to be contained within 5.0-5.5 per cent during 2006-07.

M3 projected to expand by around 15.0 per cent for 2006-07. In normal circumstances, the policy preference would be for maintaining a lower order of money supply growth in 2006-07.

Deposits projected to grow by around Rs.3,30,000 crore for 2006-07.

Adjusted non-food credit projected to increase by around 20 per cent, implying a calibrated deceleration from a growth of around 30 per cent ruling currently.

Appropriate liquidity to be maintained to meet legitimate credit requirements, consistent with price and financial stability.

Ceiling interest rate on non-resident (external) rupee deposits raised to US dollar LIBOR/SWAP plus 100 basis points.

Ceiling interest rate on export credit in foreign currency raised to LIBOR plus 100 basis points.

Provisioning for standard advances raised to 1.0 per cent for personal loans, capital market exposures, residential housing beyond Rs.20 lakh and commercial real estate loans.

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