The Annual Policy Statement for the year 2007-08 also placed aggregate deposits growth in 2007-08 at around Rs.4,900 billion and a graduated deceleration of non-food credit to 24.0-25.0 per cent in 2007-08. Monetary policy in India has to also contend with the burden of challenges emanating from other sources.
Under the Bank’s Policy Targets Agreement with the Minister of Finance, the Bank seeks to avoid unnecessary variability in interest rates, output and the exchange rate as it goes about maintaining low inflation. The Bank’s primary monetary policy instrument is the Official Cash Rate (OCR).