The Reserve Bank of India kept repo rates
unchanged at 8%, while reducing cash reserve ratio by 25 basis points to 4.25%,
which will release Rs 17,500 crore into the system. Global growth prospects
have deteriorated further and downside risks have increased, hence GDP growth
forecast for FY13 has been cut to 5.8% from 6.5% and inflation target has been
raised to 7.5% from 7.0%. Slower growth and excess capacity in some sectors will
help moderate core inflation. The large current account deficit and the fiscal
deficit continue to pose significant risks to both growth and macroeconomic
stability. Industrial output picked up marginally in August and the services
PMI showed a modest improvement in September, but the outlook remains
uncertain.
Read
lot more in Rubber4U – 1st November 2012 issue
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