The Reserve Bank has said the increase in global crude prices was more
than what was anticipated, and described the hike in retail fuel
prices as a step in the right direction. Also in the news
"The government's announcement (of hike in petroleum products)
involves some pass-through and some burden sharing. It is a very, very
positive step in the right direction," RBI Governor Y V Reddy told
reporters here last evening.
"Our overall assessment is that we must recognise that there are three
extraordinary factors in the global situation that have converged at
the same time. These relate to food, financial markets and fuel,"
Reddy said.
Asked whether the oil bonds would be given Statutory Liquidity Ratio
(SLR) status, the RBI chief said: "We in RBI would like to maintain
the integrity of the SLR regime."
Pointing out that the uncertainty in the global oil scenario was not
entirely unexpected, he said: "Actually, increase in oil prices has
been more than what was anticipated, though we have factored in the
possibility of high volatility in oil prices."
Replying to a question on global developments, he said "Currently, the
global situation is quite extraordinary. As mentioned in the monetary
review policy, we in the RBI are carefully monitoring the global and
domestic developments with regard to growth, inflation and financial
markets."
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