INDIA'S CREDIT POLICY AIMS TO CONTROL LIQUIDITY

  India's credit policy package for
  fiscal 1987/88 (April-March) will help ease inflationary
  pressures and control the growth of overall liqudity, the
  Reserve Bank of India (RBI) said in a statement.
      The package, announced earlier this week, will raise
  commercial bank statutory liquidity ratios to 37.5 pct from 37
  pct, effective April 25, and will increase cash reserve ratios
  on foreign currency (non-resident) accounts to 9.5 pct from
  three pct, effective May 23, it said.
      Excess liquidity pushed wholesale and consumer retail
  prices higher in 1986/87 on previous year levels, RBI governor
  R. N. Malhotra said in a statement.
      Malhotra said India's M-3 money supply grew 209.24 billion
  rupees in the fiscal year to March 13, compared to a growth of
  155.38 billion in the same period the year before.
      Commercial bank aggregate deposits rose to 164.10 billion
  in the same period, against 120.66 billion in the corresponding
  months of fiscal 1986/87, he said.
      The Finance Ministry in a report issued in February
  predicted India's fiscal 1986/87 wholesale price-linked
  inflation rate at about 6.5 pct against 3.8 pct in 1985/86.
  

