Highlights of RBI's Mid-Quarte?r Review of FY12 monetary policy


Following are the highlights of the Reserve Bank of India's Mid-
Quarter Review of Monetary Policy for 2011-12 (Apr-Mar):
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MEASURES
* RBI policy keeps Repo Rate, CRR unchanged
* RBI policy keeps Repo Rate unchanged at 8.50%
* RBI policy keeps CRR unchanged at 4.75%
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INFLATION
* "Credible fiscal consolidation" key for inflation outlook
* Fiscal slippages adding to inflationary pressures
* Notwithstanding growth slowdown, inflation risks remain
* Timing, magnitude of future rate action to hinge on inflation
* Rise in crude prices have increased upside risks to inflation
* Rupee fall, fiscal gap has increased upside risk to inflation
* There is still significant suppressed inflation in fuel
* Inflation in fertilisers, power remain suppressed
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GROWTH
* Most econ indicators show growth slowdown
* See econ performance in Jan-Mar better vs Oct-Dec
* See current acct gap high on sluggish exports growth
* See current acct gap high on sharp rise in crude oil prices
* Financing of current acc gap to pose a challenge
* Sluggish global growth to hit growth of emerging econs
* Eurozone uncertainty, high oil prices to hit emerging econs
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LIQUIDITY
* CRR cut on Mar 10 needed on structural liquidity deficit
* M3, credit growth moderation reflect econ slowdown
* Liquidity has remained significantly in deficit mode
* CRR cut, OMOs infused 800 bln rupee primary liquidity
* See liquidity easing further in coming weeks
* Liquidity has improved post CRR cut, OMO bond buys