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RBI leaves bank rate unchanged
Mumbai, Nov 03: Reserve Bank of India has left bank rate and repo rate unchanged at six per cent and 4.5 per cent respectively.
Mumbai, Nov 03: Reserve Bank of India has left bank rate and repo rate unchanged at six per cent and 4.5 per cent respectively.
Announcing the mid-term monetary and credit policy today, the RBI has revised the GDP growth from six per cent to 6.5-7.0 per cent for 2003-04.
Stating that inflation outlook remains benign, RBI has projected an inflation rate of 4-4.5 per cent with a possible downward bias as compared to the earlier projection of 5-5.5 per cent.
RBI Governor Y V Reddy, who announced his maiden policy, said the apex bank will continue with the present stance of preference for a soft and flexible interest environment.
On the borrowing programme RBI said, "The persistence of large aggregate borrowings of the central and state governments continues to be a matter of concern."
It is essential to pursue, promptly and with resolve, fiscal consolidation from a medium term perspective, Reddy said.
"There is a need for efforts in the direction of widening the revenue base, rationalisation of expenditure and enhancing productivity of public investment already made or to be made in both commercial and social sectors," the apex bank said.
Referring to the foreign exchange market, RBI said all foreign currency loans above USD 10 million by banks can be extended only on the basis of a well-laid policy of the bank boards on hedging, except in some cases.
These cases are where forex loans are extended to finance exports and banks may not insist on hedging but assure themselves that such customers have uncovered receivables to cover the loan amount and secondly where such loans are extended for meeting of forex expenditure, the apex bank said.
Bureau Report
RBI Governor Y V Reddy, who announced his maiden policy, said the apex bank will continue with the present stance of preference for a soft and flexible interest environment.
On the borrowing programme RBI said, "The persistence of large aggregate borrowings of the central and state governments continues to be a matter of concern."
It is essential to pursue, promptly and with resolve, fiscal consolidation from a medium term perspective, Reddy said.
"There is a need for efforts in the direction of widening the revenue base, rationalisation of expenditure and enhancing productivity of public investment already made or to be made in both commercial and social sectors," the apex bank said.
Referring to the foreign exchange market, RBI said all foreign currency loans above USD 10 million by banks can be extended only on the basis of a well-laid policy of the bank boards on hedging, except in some cases.
These cases are where forex loans are extended to finance exports and banks may not insist on hedging but assure themselves that such customers have uncovered receivables to cover the loan amount and secondly where such loans are extended for meeting of forex expenditure, the apex bank said.
Bureau Report