RBI leaves interest rates unchanged

As expected the Reserve Bank of India on Tuesday left interest rates unchanged, repo rate remains at 7.25 per cent.

In his last policy statement, RBI governor Duvvuri Subbarao assured, “(RBI) will be rolled back in a calibrated manner as stability is restored to the foreign exchange market, enabling monetary policy to revert to supporting growth with continuing vigil on inflation.”

RBI asks government to take urgent measure to bring down the current account deficit.

The rupee is continued to be in vulnerable state. On Monday it ended at 59.42 to the dollar.

“India is currently caught in a classic ‘impossible trinity’ trilemma whereby we are having to forfeit some monetary policy discretion to address external sector concerns,” Subbarao said.

“It should be emphasised that the time available now should be used with alacrity to institute structural measures to bring the CAD down to sustainable levels,” he added.

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