Search the Internet          Tips  Sites: Finance, Investment

Jalan rules out cut in CRR, Bank Rate; says no pressure on BoP

Kanchana Suggu in Bombay

The Reserve Bank of India Governor Bimal Jalan on Thursday ruled out any cuts in Bank Rate or the cash reserves ratio.

He also said that India's balance of payment was not under any pressure at present. He, however, cautioned that there may be some in the near future.

The rupee, convertible only on the current account, fell to a new life low 46.93 to the dollar on Thursday. Its previous low was 46.92 in October.

"These fluctuations are minor. There is nothing to worry about," Jalan told reporters on the sidelines of a conference in Bombay.

While addressing a gathering of businessmen in Bombay, Jalan assured, "There is no visible pressure on the balance of payments as of now. There might be some in May-June but we will tackle it."

He said that the external environment is comfortable.

The RBI will announce the Monetary and Credit Policy on April 19.

Jalan said RBI is also mulling restoring export refinance limits and lowering export finance rates.

"Despite the oil problems of last year, we have our highest level of foreign exchange reserves."

On Wednesday, the Associated Chambers of Commerce and Industry suggested that there was a need for a one per cent reduction in bank rate and credit reserve ratio to generate demand, boost new investments and revive industrial production.

In a note the Reserve Bank of India, before the Credit Policy to be announced next week, Assocham also suggested that the policy should use moral persuasion to advise banks to soften interest rates and give preferential treatment to small and medium enterprises in the emerging competitive scenario.

Assocham had pointed that though successive credit policies have reduced interest rates, yet they continue to be higher than most of the neighbouring and competing countries.

Additional inputs: Agencies

Money
Business News

Tell us what you think of this report