The Reserve Bank on Tuesday said it is confident of the country achieving a economic growth rate of 8-8.5 per cent, even as measures will be taken to contain inflation at 5.5 per cent for the current fiscal.
The RBI in its annual policy statement for 2008-09 said "Inflation would be brought down to around 5.5 per cent in the current fiscal with a preference for bringing it close to 5 per cent as soon as possible."
Notwithstanding the inflation-controlling measures, RBI maintains the GDP growth rate projection in the range of 8 per cent to 8.5 per cent, provided global financial and commodity markets and real economy are broadly aligned with the central scenario as currently assessed and normal monsoon conditions prevail in the country.
The apex bank hiked the Cash Reserve Ratio (CRR), the mandatory amount banks have to keep with the central bank without earning any interest, by 0.25 per cent to suck out liquidity from the system in a bid to contain inflation that is reigning at a three-year high level at present.
Earlier in April this year RBI had hiked, CRR by 50 basis points to 8 per cent, in two tranches of 0.25 bps each -- effective from April 26 and May 10 respectively -- as part of concerted efforts to ease inflation.
The pick-up in inflation during the fourth quarter of 2007-08 mainly emanated from supply-side pressures such as increase in domestic petrol and diesel prices, wheat and oilseeds, and the adjustment in steel prices in March this year due to the surge in international rates.
RBI hikes CRR by 25 bps
The Monetary and Credit Policy 2007-2008
Inflation, the silent killer!
