India’s central bank hikes statutory liquidity ratio

Concerned over creeping inflation, India’s central bank Tuesday slightly tightened its monetary policy for this fiscal while retaining most policy rates, with signs of an industrial recovery providing the necessary cushion.

A hike of 100 basis points in the statutory liquidity ratio, while maintaining status quo on all other policy rates and reserve ratios were the key points of the half-yearly review of the policy conducted by Reserve Bank of India (RBI) Governor D. Subbarao here.
“As always, the Reserve Bank will endeavour to ensure price stability and anchor inflation expectations,” Governor Subbarao told the chief executives of commercial banks at the central bank’s headquarters here.
“It bears emphasis that the Reserve Bank is mindful of its fundamental commitment to price stability. It will continue to monitor the price situation in its entirety and will take measures as warranted by the evolving macroeconomic conditions swiftly and effectively.”
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