Governor Speak

On growth rate targets: The targeted rate of growth of the economy over the next five years is between 6.5 per cent and 7 per cent. The debt service ratio will go down to 20 per cent in the next five years. (Quoted in October).

On ad hocs: Under the agreement signed in 1994 from the financial year 1997-98, the automatic magnetisation of the Budget deficit through the ad hoc treasury bills is to be terminated. The new system does not necessarily mean that the RBI will not provide any support to the government. However, there has to be an agreed limit on the support that the RBI can give to the government in financing its deficit.

 

On CRR: The objective of the banking sector reforms is to bring down the CRR to 10 per cent and below and the average statutory liquidity ratio to 25 per cent. The changes in the reserve ratio requirements have implications in relation to both CRR and open market operations as instruments of monetary policy.

Inflation will continue to be the main objective of the credit policy. (Quoted on October 11).