The Hindu Business Line : ‘Policy underscores strength of economy’

Chennai, Oct. 24 The Credit Policy presents a comprehensive analysis of developments in both the global and domestic markets and underscores the strong fundamentals of India’s economic development, according to Ms Chanda Kochhar, Joint Managing Director, ICICI Bank

The mid term review sets the stance of monetary policy as striking an optimal balance between preserving financial stability, maintaining price stability, anchoring inflation expectations and sustaining the growth momentum, she said.

“While growth projections for our economy have been revised from 8 per cent to the range of 7.5-8 per cent, we still remain one of the fastest growing economies in the world. This should also be seen in context of the overall slowdown in global economic growth – China’s growth rate in the third quarter this year has declined to less than 10 per cent for the first time in more than five years”, she added.

Akhilesh Gupta, Associate Director, Fixed Income, Aviva India said “We did not expect any changes in rates in today’s credit policy. The RBI has recently taken measures by cutting CRR by 250 basis points to alleviate liquidity pressures faced by banking system from sale of US dollar and redemption pressures from debt mutual funds. In addition, cut in repo rate by 100 bps.”

He added that expectations were that the RBI would announce a road map for reduction in SLR.

Ms Meera Sanyal, Country Executive, the Royal Bank of Scotland said that after having moved swiftly over the last fortnight to ease the monetary levers, maintaining status quo on rates for the time being is a pragmatic move.

“This signals that the central bank will take appropriate action as and when the need arises, given the volatile and dynamic nature of the developments in the global financial markets, rather than wait for predefined dates to announce changes.

We expect that the RBI will continue to pro-actively calibrate its policy tools to tackle intensifying pressures on the rupee and rising downside risks to growth ,” she said.

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