PMEAC-INFLATION 2 LST

In its last monetary review, the RBI took only marginal
steps to curb money supply by increasing the statutory
liquidity ratio, the amount of money that banks park in cash,
gold and government securities, by one per cent to 25 percent.
Since, most banks have been maintaining the SLR at over
25 per cent, it would not have desirable impact in controlling
money supply, analysts said.
It also discontinued the special funding facility for
banks to finance liquidity-strapped mutual funds, which too
would not have that much impact as not many funds were using
this facility now.
With the economy growing by 7.9 per cent in the second
quarter of this fiscal, up from 6.1 per cent in the previous
three months period, analysts said RBI can now focus on
curbing inflation. PTI