Reserve Bank of India (RBI), the apex banking regulator of India, has announced that it will meet to take call on second quarter review of monetary policy on October 25. RBI has scheduled the meeting with the chief executives of major scheduled commercial banks at 11.00 a.m. on October 25, 2011 at the Central Office, Reserve Bank of India, Mumbai. After the meeting Dr. D. Subbarao, Governor, Reserve Bank of India will announce the Second Quarter Review of Monetary Policy 2011-12 on same day. RBI has announced the first quarter review of monetary policy on July. Amid spiraling inflation, the central Bank of India has hiked key policy rates by 25 basis points while announcing the mid-quarter monetary policy review, September 2011. According to this report, RBI had hiked the repo rate by 25 bps to 8.25% from 8%, and reverse-repo rate stands adjusted to 100 bps below the repo rate at 7.25% and the marginal standing facility (MSF) rate to 9.25%. Despite the strong monetary policy stance it failed to tame inflation. In last 18 months RBI has increased the key policy rate 12 times. RBI has raised the key policy rates by 350 percentage points to control inflation, which is sharpest upper movement in interest rate around the world. Even though, India is facing sharpest inflation rate amongst the emerging economies. Till now rain is normal within the country, although flood is affecting the production of wheat in Bihar. The production of food grain is expected to increase this year. RBI is alert and watchful on the problem of inflation and depreciating currency. Upcoming month is crucial for the RBI to intact the momentum of growth in adverse condition.
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