The policy further states that appropriate liquidity has to be maintained to meet legitimate credit requirements, consistent with price and financial stability. The projected expansion of money supply (M3) is placed at 17-17.5%, amidst a global trend of money supply expansion
In case of the financial market the policy has proposed the inclusion of corporate bonds in repo. The average cut-off yield on 182-day T Bills is to be used as the benchmark for floating rate bonds. Also the RBI has allowed single entity credit default swaps.
Foreign deposits will be less attractive as the ceiling interest rate on FCNR (B) and NR(E)RA deposits reduced by 50 basis points. Overseas investment by mutual funds increased to $4 billion. The individual overseas investment limit increased from $50,000 to $1,00,000. To give variety to financial products, working groups will study the introduction of currency futures and interest rate futures. Franklin Templeton's report on the credit policy stated,The policy indicates a shift back towards focusing on growth momentum and defending the export competitiveness of the currency. The policy is likely to bring some relief to the consumers and the markets. But inflation is still a concern.