Macroeconomic and Monetary Developments: First Quarter Review 2009-10 (Main Points)

July 28, 2009: Reserve Bank of India Governor D. Subbarao has released the review and update on the monetary policy for the current fiscal Today.

Key Rates:

  1. Bank Rate =6 % (No Change)
  2. Repo Rate = 4.75 % (No change)
  3. Reverse Repo Rate = 3.25 % (No change)
  4. Cash Reserve Ratio : 5 % (No Change )
  5. Statutory Liquidity Ratio = 24 % ( No change )

What are these rates ?

Forecasts :

  1. Inflation : 5 % ( earlier forecast was 4 % )
  2. About Negative Inflation : It is just a statistical phenomena
  3. Growth Projects : 6 % plus
  4. Money Supply : may grow 18 % this fiscal

Some Noteworthy Points:

  1. RBI announces its Monetary Policy every year and announces its reviews quarterly.
  2. According to the current available assessment of the IMF, the global economy is projected to contract by 1.4 per cent in 2009 and to expand by 2.5 per cent in 2010.
  3. However, the growth outlook of India and China for 2009, however, has been revised upwards by the IMF.
  4. The fourth Advance Estimates place the total food grain production during 2008-09 at a record 233.9 million tonnes.
  5. The core infrastructure sector grew by 4.8 per cent during the first quarter of 2009-10 as compared with 3.5 per cent growth during first quarter of 2008-09.
  6. This growth was basically due to acceleration in electricity, cement and coal.
  7. Index of Industrial Production (IIP) registered a growth at 1.9 per cent during April-May 2009 ( it regisstered a negative growth in 2008-09 in corresponding Quarter).
  8. The Union Budget for 2009-10, presented against the backdrop of persistent global economic slowdown and the associated dampened domestic demand, has placed the fiscal deficit at 6.8 per cent of GDP in 2009-10 with a view to providing the necessary boost to demand and thereby support a faster recovery.
  9. For last 8 months since October 2008 , exports as well as imports are contracting due to global recession. There was more decline in imports than exports and this has declined the merchandise trade deficit (April May )
  10. For the year as a whole, net capital flows fell from US$ 108.0 billion in 2007-08 to US$ 9.1 billion in 2008-09, while the current account deficit widened from 1.5 per cent of GDP to 2.6 per cent of GDP during the same period.
  11. The impact of a severe external shock on India’s BoP was managed with a loss of reserves of only US$ 20.1 billion (net of valuation) without resorting to any extraordinary measures.
  12. The WPI inflation, which was on a path of sharp decline from the high peak level of August 2008, turned negative in June 2009, and since then the negative inflation continues (-1.2 per cent as on July 11, 2009).
  13. Notwithstanding the negative WPI inflation, food articles inflation (i.e. primary as well as manufactured) remains high at 8.9 per cent (as on July 11, 2009). Inflation as per Consumer Price Indices (CPIs) also continues at elevated levels (in the range of 8.6 per cent to 11.5 per cent for different consumer price indices in May/June 2009).


13 Comments

  1. Anonymous

    July 28, 2009 at 2:10 pm

    thanks a lot sir

  2. Rajesh

    July 28, 2009 at 6:23 pm

    Excellent by Rajesh Chennai

  3. S Soorya Narayan

    July 28, 2009 at 6:47 pm

    thanks , great work

  4. Abhi

    July 29, 2009 at 1:09 am

    Excellent…one stop shop for all GK needs…keep it going…

  5. nagamani

    July 31, 2009 at 2:07 am

    very good stuff..very useful..keep it up..

  6. nagamani

    July 31, 2009 at 2:07 am

    very good stuff..very useful..keep it up..

  7. pawan kr

    August 3, 2009 at 9:43 am

    thanks
    and Sir i request to you that please provide more relevant questions and idea to RBI examination point of view.

  8. Anonymous

    August 7, 2009 at 12:52 am

    sir,m not ablt to find mega quizzes today on your blog today..i am a regular reader of ur blog…kindly check for the same…

  9. Anonymous

    August 7, 2009 at 12:56 am

    kinldy tell me how to find link to mega quizzes on your blog today…they are not appearing on the home page today…plzzz…i want to read them asap…plz help

  10. Anonymous

    August 14, 2009 at 9:13 pm

    pls tell us the source of this questions

  11. manjunath c sapk b school

    August 16, 2009 at 12:15 am

    thank you for providing this knowledge of rbi quarter review. i thank u all the team of gktoday

  12. Anonymous

    September 1, 2009 at 5:58 am

    heloooo
    thax a lot…………………………
    sir i wanna know one thing is that how to take print of the mega ques with d ans……………

    plss lemme knowwwwwwwwwwwwwwwwwww

  13. Anonymous

    December 22, 2009 at 10:33 pm

    sometimes no words means fantastic……

Leave a Reply to Abhi Cancel reply