Zee Media Bureau
New Delhi: Raghuram Rajan, who was Chief Economic Advisor in the Finance Ministry before taking over as RBI Governor on September 4, is scheduled to announce the mid-quarter monetary policy review today.
Raghuram Rajan had said that apart from monetary stability, the central bank has the mandate for inclusive growth and development as well as financial stability.
Let’s have a look at the key expectations from Rajan’s maiden policy review stipulated for Friday.
1. Prior to Fed decision it was widely expected that Rajan might keep policy rates unchanged. But with the recent decision of Fed to continue with the bond buying programme, many experts believe that he may cut the repo rate by minimum 25 basis points.
2. Experts also believe that Rajan might be hawkish and reiterate the importance of low and stable inflation for sustained economic recovery.
3. There are expectations that Rajan may scale back some of the emergency measures that have helped the rupee bounce from a record low.
4. Some economists expect Rajan to build the case for shifting the central bank's key inflation measure to the consumer price index from the wholesale price index.
5. Rajan is widely expected to leave the marginal standing facility (MSF) unchanged.
6. Rajan might relax a requirement that banks meet 99 percent of their cash reserve ratio on a daily basis.
With Reuters Inputs
First Published: Friday, September 20, 2013, 09:03