RBI policy document:: Equity Bull

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Important Points -

*  Increase the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 8.0 per cent to 8.25 per cent with immediate effect.

*  Since the Reserve Bank's First Quarter Review of July 26, the global macro economic outlook has worsened. There is growing consensus that sluggishness will persist longer than earlier expected

*  Domestically, even as many indicators point to moderating growth, both headline and non-food manufactured products inflation are at uncomfortably high levels. Crude oil prices remain high

*  Inflationary pressures expected to ease towards the later part of 2011-12.

*  In contrast to advanced economies, growth remained relativelyresilient in emerging and developing economies, notwithstanding some moderation in response to monetary tightening to contain inflation

*  Year-on-year money supply (M3) growth at 16.7 per cent in August was higher than the projection of 15.5 per cent for the year reflecting higher growth in term deposits and moderation in currency growth

*  In recent weeks, as a result of global risk aversion, the rupee has depreciated, which may have adverse implications for inflation.

*  Reinforce the impact of past policy actions to contain inflation and anchor inflationary expectations.