“A Study on Economic Performance, after a new RBI Governor Ride”

Mallikarjun Tippanna Bali

Abstract


The RBI announced its first bi-monthly monetary policy and kept its policy interest rate unchanged, as expected. The RBI kept its repo rate at 8%, reverse repo rate at 7%, bank rate and marginal standing facility rate at 9%. In addition RBI did not touch the reverse ratios, CRR at 4% and SLR at 23%.

The RBI clearly indicated that its policies will be inflation focused, especially on CPI. The RBI clearly stated that it was intending to target 8% CPI inflation by January 2015 and 6% by January 2016. Keeping that in focus and the current inflation, the RBI decided to left the rate unchanged. Besides, RBI clarified that if the inflation remained with envisioned targets, it would not tight the policy in near term.

After taking charge as Governor of RBI, Raghuram Rajan has brought a drastic change in the Economy. His monetary policies have responded as he had expected. During a span of six month the fundamentals of economy have started performing well because of monetary policy formulated by RBI.

This paper focuses on the monetary policy formulated by the new RBI governor and their impact on the key fundamental of economy.


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ISSN : 2251-1547