RBI annual policy: GDP at 7.5-8 pc; bank rates

Mumbai, Apr 18: Reserve Bank of India (RBI) today announced that the country could maintain a GDP growth rate between 7.5 to 8 per cent for the current fiscal year, even as it left the key monetary instruments - the bank rate, cash reserve ratio (CRR) and repo rate unchanged.

According to RBI annual policy statement for the financial year 2006-07, the projection is made in the light of accelerated growth in agriculture sector at 2.3 per cent in 2005-06, from a low of 0.7 per cent in 2004-05, and also due to the positive industrial and manufacturing outlook. The industrial growth in 2005-06 was up at 8 per cent, from 7.4 per cent in 2004-05.

Unveiling the policy stance, RBI said the inflation rate on an annualised basis would be in the range of 5 to 5.5 per cent, while expansion in money supplying would be maintained at 15 per cent for the current fiscal.

While leaving the bank rate, CRR, repo and reverse repo rates unchaged at 6 per cent, 5 per cent, 6.5 per cent and 5.5 per cent, respectively, the Central Bank asserted its readiness to act in a timely and prompt manner on any sign of evolving circumstances, impinging on inflationary expectation.

Later addressing the top executives of banks and financial institutions, RBI Governor Dr Y V Reddy asked the bankers to focus on credit quality and financial market condition, to support export and investment demand in the economy, maintaining macro-economy, particularly for financial stability.

While RBI would ensure a conducive credit and monetary environment to enable the growth momentum, it would respond swiftly to the evolving global development, the Governor said.

UNI