Oct 27, 2012, 01.45 PM IST | Source: PTI

Subbarao meets FM ahead of RBI's policy review

Ahead of second quarter review of credit policy, Reserve Bank Governor D Subbarao today met Finance Minister P Chidambaram and discussed macro-economic situation.

Subbarao meets FM ahead of RBI's policy review

Ahead of second quarter review of credit policy, Reserve Bank governor D Subbarao today met Finance Minister P Chidambaram and discussed macro-economic situation.

"I met the finance minister and reviewed macro-economic situation with him," Subbarao told reporters after the meeting here. The RBI will review its monetary policy for the second quarter on October 30.

It is a standard practice for the RBI governor to discuss the state of economy with the Finance Minister before review of the monetary policy. In order to ease the liquidity situation, the RBI in its mid-quarterly monetary policy on September 17 had cut cash reserve ratio - the percentage of deposits banks keep with central bank - by 0.25 per cent.

However, in view of high inflation, the central bank refrained from reducing lending rates. The RBI has made it clear that controlling inflation would be its top priority. In its effort to bring down inflation, the RBI hiked interest rates by 350 basis points between March 2010 and October, 2011.

Industry has been clamouring for a rate cut as it feels that lower interest rate would help kickstart the investment cycle. Industrial output growth has slumped to 0.4 per cent in the April-August period, down from 5.6 per cent in the same period in 2011-12.

The impact of tight money policy and global economic downturn was felt in India as the economic growth in the 2011-12 fiscal fell to a nine year low of 6.5 per cent. In the April-June quarter of the current fiscal, the growth was 5.5 per cent.

Invest in P Chidambaram

Buy Sell

P Chidambaram
Let the Voting Begin
READ MORE ON  rbi, gover, fm, meet

ADS BY GOOGLE

Buy & sell politicians on Power Play
- the political stock exchange

Price Update

Arvind Kejriwal

1711.96 1.85 0.11%

35128

Bought today

23053

Sold today

0.36%

User holding

video of the day

Chandra says satisfied with TCS' FY14, FY15 to be better

Explore Moneycontrol

Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.