With the end of the year days away, a look back sees a year of high inflation which lead to a tighter monetary policy. Despite the demand for an easing of the stringent policies, the industry has seen rules and regulations continue to tighten by the Reserve Bank of India (RBI). The bank was unable to bring down policy rates that would have helped ease the pressures of inflation.
The indications of the inflation rate cooling down is a welcome site, but is likely the result of the central bank infusing more liquidity into the banking system. That move is handled by a cut in the cash reserve ratio (CRR). The move has been cheered on by the markets, and home loan interest rates began a welcome downward trend as well. This occurred while more tough news of deeper cuts in the rates, which can be expected in the early run of 2013. (Press Release)