Growth Pressure And Inflation Coexist &Nbsp; India'S Monetary Policy Is Limited.

This Thursday,

On the 15 day, Pan Xiangdong, chief economist of China Galaxy Securities, told an interview with our reporter that the India central bank adopted a non routine operation to reduce the deposit reserve ratio of financial institutions before the 15 meeting of interest rates conference, which further reflected that the cash shortage of the banking system needed to be solved, but this does not mean that it is imperative to cut interest rates.

In particular, with the new surge in international oil prices, the growth rate of domestic inflation of 80% energy imported from India may accelerate.

Meanwhile, the growth rate of many emerging economies, including India, has generally slowed down.

When facing the external environment uncertainty risk and the domestic structural problems have not yet been effectively solved, internal and external troubles make some emerging market countries' economic prospects worrying.

Although many emerging economies have begun easing monetary policy, India and other countries beset by imported inflation will have limited monetary policy.

Last Friday, the Central Bank of India unexpectedly announced that the deposit reserve financial institutions need to remain in the central bank's reserve ratio, the cash reserve rate (CRR), which has been cut by 75 basis points, from the current 5.5% to 4.75%.

This is the second time the Central Bank of India has lowered the deposit reserve ratio this year.

The Central Bank of India has said that the high level of overall deficit in the banking system is a dangerous signal. It will reduce the deposit reserve ratio by 75 basis points, which can release 480 billion rupees (about 9 billion 650 million US dollars) in cash for the banking system, so that the India banking system will have enough financing capacity to support its economic development.

At that time, some analysts believed that with the double slowdown of economic growth and inflation, India's monetary policy might have entered the cycle of interest rate cuts.

However, the announcement of the latest inflation figures changed that expectation.

The latest figures released on the 14 day show that the pace of inflation in India has accelerated for the first time in nearly 5 months.

In February, due to the substantial increase in food prices, especially vegetable and protein foods, India's inflation rate reached 6.95%, exceeding expectations.

International crude oil prices have surged 17% this year, bringing a new round of inflation threat to India.

This has become the direct cause of India's central bank's failure to act.

The analysis is generally believed, though

Pan Xiangdong said that in the past two years, India's inflation rate has basically maintained at two digits. Therefore, the central bank has to tighten monetary policy.

The high interest rate policy has greatly suppressed the production and investment of enterprises, thus restricting the expansion of the economy.

At present, the average profit level of India enterprises has dropped by 12%, making the financial situation of enterprises more tense.

At the same time, the bad debts level of state-owned banks in India continues to be high, which is more difficult than other private banks.

Trade data also showed that the growth of imports in India between April 2011 and February this year was significantly outstripped by exports, with a trade deficit of US $166 billion 800 million, due to the downturn in consumption in major markets such as Europe and the United States.

India's Ministry of Commerce predicts that this figure is likely to continue to expand.

"This is largely affected by the continued deterioration of the external environment, making India, a big export dependent country, suffer a great impact."

He added.

India's central bank said in a statement that GDP growth in the fourth quarter last year showed that the country's economic growth momentum was weakening and concentrated on industrial production.

In the coming period, India's economic growth will not be much improved. This is mainly due to the continued weakness of external demand and the lack of vitality of domestic investment.

President Patil has announced that he expected to reduce his economic growth forecast to around 7% in the current fiscal year.

Mu Keji, the finance minister, said the federal budget report, which will be released on Friday, is expected to set an economic growth target of 7.5% to 8% for the fiscal year 2012 to 2013 from April 1st.

There is a view that the growth rate of 6.1% is the lowest growth rate in India in the past 3 years, and it is also the seventh consecutive quarterly slowdown.

Pan Xiangdong believes that a sharp slowdown in economic growth is an unavoidable problem for the India government.

At the same time, India will also face the challenge of both fiscal deficits and current account deficits.

When the uncertainty of external environment is increasing, and domestic structural problems have not yet been found, domestic and foreign troubles make India and other emerging market economies worried.

"Overall, in the face of the new wave of quantitative easing launched by the developed economies, the global monetary easing pattern has already appeared.

But countries such as India, which are beset by imported inflation,