There is nothing new again in Reserve Bank of India (RBI) Mid Year Credit Policy. Now, even a common man guess much about the Credit Policy of RBI.
As usual RBI has increased the its benchmark rates by 25 basis points to 7.50 per cent, hiked reverse repo rates by 25 bps to 6.50 per cent under similar fashion like earlier policy.
All these are done to curb high inflation rate which is currently at 9.06%. This increase in rates will naturally put some extra pressure on bank’s earning and all the loan products will moves up like Home Loan, Vehicle Loan etc. See what RBI said about this, “The RBI has sought to maintain an interest rate environment that moderates inflation and checks inflationary expectations.” One thing being a common man I could not understand if government or RBI is very much interested in bringing inflation down why are they pumping lot of money in market.
RBI is saying that they are ready to sacrifice growth at the cost of lowering inflation. But government led by Manmohan singh is saying that they are determined to reach 8.5% growth. Now I am amazed how to do this ?
Till date The Reserve Bank of India has raised its policy rate by a total of 275 basis points in ten moves since March 2010. In my view only way to bring inflation down is to reduce the purchasing power of common buyers.
There should be restriction of easy loan facilities.Unless we restrict the Purchasing capicity no credit policy of either RBI or Government will effective in curbing inflation.
