1. MONETARY POLICY 2011-12
 Repo rate hiked by 50 bps from 6.75% to 7.25%
 Reverse Repo rate hiked by 50 bps from 5.75% to
6.25% (dependent
 variable on the Repo rate – 100 bps below the Repo
rate)
 CRR kept unchanged at 6%
 SLR kept unchanged at 24%
 GDP growth projection for FY 2011-12 placed at
around 8% (in the range of 7.4% and 8.5%)

2. CONT-
 FY 2011-12 March end WPI inflation baseline projection
placed at 6% with an upward bias
 M3 growth projected at 16%, deposit growth at 17% and
non-food credit growth at 19%
 Bank rate kept unchanged at 6%.
 MSF introduced at 1% above the Repo rate (8.25%)
 LAF corridor width set at 200 bps (with base at reverse
repo – 6.25% & ceiling at MSF – 8.25%)
 MP 2011-12.docx

3. FIRST QUARTERLY REVIEW
Increase / (Decrease) At present
since March 2010
Repo Rate .5%
8%.
Reverse Repo Rate .5%
7%
Cash Reserve Ratio Unchanged 6%.
Statutory Liquidity Unchanged 24%
Ratio
Bank Rate Unchanged
6%

4. KEY FEATURES
 GDP growth projection for FY 2011-12 kept unchanged at
around 8%
 Inflation projection for March end FY 2011-12 revised
upwards to 7% from 6%

5. SECOND QUARTERLY REVIEW
Increase / (Decrease) At present
Repo Rate .25%
8.5%
Reverse Repo Rate .25%.
7.5%
Cash Reserve Ratio Unchanged
6%
Statutory Liquidity Unchanged
24%
Ratio
Bank Rate Unchanged
6%

6. KEY FEATURES
 RBI lowered the growth forecast for 2011-12 from 8%
to 7.6% (in line with our expectations)
 Inflation forecast is kept at 7% by Mar-12 end.
 Money supply and Credit growth maintained at 15.5%
and 18% respectively
 Depreciation of the rupee has emerged as another risk
for inflation.
 Indian economy continued to face suppressed inflation
as prices are administered in petroleum sector.

8. Increase / (Decrease) At present
Repo Rate Unchanged
8.50%
Reverse Repo Unchanged
7.50%
Rate
Cash Reserve .50%
5.50%
Ratio
Statutory Unchanged
24.00%
Liquidity Ratio
Bank Rate Unchanged
6.00%

9. KEY FEATURES
 The drop in November 2011 WPI inflation to 9.11%, mainly due
to softening in food inflation (4.35% for the week ended
December 3, 2011)
 GDP growth rate has fallen to 6.9% from 7.7%(expected in Q2)
 Due to sharp moderation in industrial growth to
-5.1%
 The fiscal deficit at 74.4% of budgeted 2011-12 was
significantly higher than 42.6% in 2010-11

10. CONT-
 FDs (Fixed Deposits) are offering interest
in the range of 7.25% - 9.40% p.a.
 Projection of GDP growth for 2011-12 is
revised downwards from 7.6% to 7%.
 In reducing the CRR,INR 320 bn of
primary liquidity will be injected into the
banking system

11. INFLATION RATE 2011

12. RBI projections in three reviews in 2011-12
Table 1: RBI Projections in Monetary Reviews (in %)
May-11 Jul 11 Oct-11
Growth (2011-12) 8 8 7.6
Inflation (Mar-12) 6 7 7
M3 (Mar-12) 16 15.5 15.5
Deposit (Mar-12) 17 - -
Credit (Mar-12) 19 18 18

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14. PRESENTATION BY