RBI credit policy waited with anxiety by trade and industry

Mumbai, Apr 27 (UNI) Industry, trade and financial market is waiting with bated breath the Tuesday's annual credit policy of Reserve Bank of India (RBI) amidst the country reeling under inflationary trends at around 7.33 per cent and high growth of above eight per cent taking a severe hit.

With the Government amply making it clear that the priority was to contain inflation rather than sustain a high growth, the RBI was expected to announce some measures to douse the inflationary trends and lower its indication of anticipated growth rate for the current fiscal. RBI Governor Y V Redddy had already termed the above seven per cent inflationary rates on a year-on-year basis as against the RBI's target of five per cent as ''unacceptable''.

The prevailing banking rates were: CRR 7.75 per cent, SLR 25 per cent, Bank Rate six per cent, Repo Rate 7.75, reverse repo six per cent, Prime lending rate 12.75 to 13.25 per cent, savings rate 3.5 per cent, deposit rates 7.5 to 9.6 per cent.

The Central Bank had already taken the sting out of the annual policy statement, when it on April 17 hiked the Cash Reserve Ration (CRR) by 50 basis points in two phases with the first dose of 25 basis points effected on April 26 to raise CRR to 7.75 per cent.

The second dose of 25 basis points would take the CRR to eight per cent from May five. The RBI, taking cue from Union Finance Minister P Chidambaram's statement in Parliament on the need for the Apex bank to take corrective measures to check the galloping inflation, came out with the CRR hike, bare two weeks ahead of its annual credit review meeting on April 29.

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