Expects GDP growth at 5.0% for FY2014
Reserve bank of India has released the second quarter review of monetary policy, while announcing the following policy measures.* Raised Repo rate by 25 bps to 7.75%
* Reduced MSF rate by 25 bps to 8.75%
* Raised liquidity availability at newly introduced 7-14 day tenor repo window to 0.5% of NDTL from 0.25%
Assessment
* Strengthening export growth, signs of revival in some services and agriculture could help GDP to grow 5.0% in FY14
*Both wholesale and consumer price inflation are likely to remain elevated in the months ahead
*Normalcy to the exchange market will be restored only when the demand for dollars from OMCs is fully returned to the market.
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