Key points in the Reserve Bank of Indias Mid-Year
Review of Monetary and Credit Policy for the year to March
2003, announced today.
- Bank Rate cut
to 6.25 per cent from 6.5 per cent, with effect from
the close of business on Tuesday, October 29.
- Repo rate cut
to 5.5 per cent from 5.75 per cent, with effect from
Wednesday, October 30. The repo rate is the rate at
which the central bank borrows and lends overnight funds.
- Cash reserve
ratio cut to 4.75 percent from five percent, with effect
from November 16, 2002.
- GDP growth for
the year lowered to 5-5.5 per cent from the earlier
projection of 6-6.5 per cent.
- Inflation rate
for the year likely to be around 4 per cent.
output likely to fall by around 1.5 per cent this year.
increase in flow of bank credit to industries. Upturn
in industrial production and buoyancy in exports to
- Money supply
(M3) contained within the projected trajectory of 14
- Decline in reserve
money despite large increase in foreign exchange reserves
and significant primary support to government borrowing
- Bulk of the
government borrowing programme completed at lower interest
cost and with longer maturity.
- Sharp reduction
in interest rates on various types of government and
- Reduction in
effective lending rates of banks.
build up at a low effective cost without adding to external
debt. The increase in reserves reflects higher remittances,
quicker repatriation of export proceeds and non-debt
- RBI to continue
the monetary policy stance for 2002-03 announced in
April 2002 for the remaining half of the year.
- Monetary and
prudential measures towards flexibility