Sensex plunges despite RBI’s credit policy

Markets suffered losses as traders offloaded positions soon after the Reserve Bank of India’s credit policy review was out. This time the credit policy by the RBI failed to keep the market sentiments intact. The central bank on Friday left its policy rates and reserve ratios unchanged in its half yearly review of the monetary policy. The central bank has revised GDP growth target to 7.5-8.0 per cent from 8.0 per cent earlier.

On the other hand, inflation target has been retained at 7 per cent for FY09. Inflation continued to show a welcome decline on 23rd October with the wholesale price index rising to 11.07 per cent from 11.44 per cent last week, according to media reports. However it was expected that credit policy would ease the inflation and check the global crisis.