RBI gives positive signal to economy: Fin Secy | business | Hindustan Times
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RBI gives positive signal to economy: Fin Secy

The Finance Ministry on Tuesday said the RBI's move to retain almost all key rates unchanged will give a positive signal to the economy, which is on the path of recovery.

business Updated: Oct 27, 2009 13:35 IST

The Finance Ministry on Tuesday said the RBI's move to retain almost all key rates unchanged will give a positive signal to the economy, which is on the path of recovery.

"The economy is on a comeback track but there is need for more definite and robust signal, which is I am sure what the RBI has responded to. The continuation of the policy will serve industry and business well in the months ahead," Finance Secretary Ashok Chawla told reporters.

The RBI retained the economic growth projection to 6 per cent during FY'10, while pegging inflation at much higher rate of 6.5 per cent by this fiscal end from the earlier 5 per cent.

"Inflation is basically grounded in food inflation. It is something which the government is definitely very concerned about. There are number of administrative measures which the government has taken and will continue to take to respond to... inflation is expected to be around 6 per cent by end of March 2010," Chawla said.

This is something which will be kept in mind by the policy makers, both the RBI and the government, he said.

The apex bank today raised the Statutory Liquidity Ratio, the deposits that commercial banks are to park in government securities, by one percentage points to 25 per cent, while keeping all other rates intact.

Chawla said, "SLR is something which does not really affect the ground reality. As of today the banks in any case are already operating at more than 25 per cent."