The RBI today said it has ensured ample liquidity in the system through a series of rate cuts in the last 10 months, hinting that it may keep policy rates unchanged in its quarterly credit policy review tomorrow. The comfortable liquidity resulted in pick-up in economic activity, evident from the central bank revising growth forecast upwards to 6.5 per cent for FY’10 from the 5.7 per cent it had estimated in April. “Since mid-September 2008, the policy repo (overnight lending) rate has been reduced by 425 basis points, the reverse repo (borrowing) has been brought down by 275 basis points” resulting in liquidity injection of over Rs 5,61,700 crore, RBI said in its macro-economic report released a day ahead of its first quarterly credit policy review.
RBI noted that core infrastructure sector growth accelerated to 4.8 per cent in the first quarter against 3.5 per cent a year ago, led by growth in electricity, cement and coal, while industrial output rebounded sharply. Services sector too showed positive signs, with a surge in lead indicators such as railway freight and new mobile connections, besides improvement in tourist arrivals.
RBI noted that core infrastructure sector growth accelerated to 4.8 per cent in the first quarter against 3.5 per cent a year ago, led by growth in electricity, cement and coal, while industrial output rebounded sharply. Services sector too showed positive signs, with a surge in lead indicators such as railway freight and new mobile connections, besides improvement in tourist arrivals.
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