Due to inflation RBI announced the statement of the increased in Policy rates on 3rd May 2011. To solve the problem of Inflation RBI has raised repo and reverse repo rates. RBI declares FY11-12 GDP Growth forecast, Cash Reserve Ratio (CRR), Statutory liquidity ratio (SLR), Bank Rate, HTM Bond ratio, Inflation forecast, Fiscal deficit, Food inflation, bank cash level, government borrowing.
To solve the problem of Inflation RBI have decided to take the following policy measures:
- RBI raised repo and reverse repo rates by 50 basis points taking repo (rate at which it lends to banks) to 7.25% and reverse repo (rate at which it borrows) to 6.25%.
- The Bank Rate remains at 6%.
- The CRR has been left unchanged at 6%.
- Saving account interest has also been raised by 50Basis point to 4 % from 3.5 %.
- Economic growth projected lower at 8 % for FY12.
- WPI inflation projection lowered to 6 %.