OMO a monetary policy tool, deposit accretion picking-up: RBI

I the second-half of 2010, transmission (of monetary policy action) has been good. "Banks have raised their rates as also their base rates," the RBI Deputy Governor said. Gokarn voiced concern over the decline in foreign direct investment (FDI) in 2010 and the possibility continuing in 2011 as well. "The recovery in the US economy may lead to global re-balancing of portfolios. This may hit the emerging markets' attractiveness and the country may not receive capital inflows that it would otherwise have," Gokarn said. This, combined with oil and fertilisers which are significantly imported into the country and whose prices are rising, may put pressure on India's current account deficit, (pegged close to 3.5 per cent of GDP) Gokarn said.