RBI Annual Report confident of credit growth

The report says that the RBI will continue with its present stance on interest rates, including its preference for soft interest rates.

The central bank plans to impart greater flexibility to the interest rate structure in the medium-term, the report adds.

The report says that the monetary and credit policy for the year 2002-03, announced in April this year, projected the real GDP growth at 6 to 6.5 per cent, the rate of inflation assumed slightly lower than 4 per cent and the aggregate deposit growth of scheduled commercial bank at 14 per cent.

The report says that balanced development of various constituents of the money market in an environment of greater transparency and market discipline were important factors in the efficient conduct of monetary policy in the coming years.

"Phasing out non-bank participants from the call or notice money market and activating the repo market are the most significant policy initiatives for the future evolution of the money market," the report adds.