RBI Leaves Key Rates and Ratios Untouched

In its review of economic policy, he Reserve Bank of India has refrained from changing any of the important policy rates and reserve ratios. As a result the bank rate continues to be 9 per cent, the repurchase (repo) rate 8 per cent, reverse repo rate 7 per cent, the cash reserve ratio 4.25 per cent and statutory liquidity ratio 23 per cent.

Reserve Bank of India

In a statement, the RBI said: “In view of inflation pressures ebbing, monetary policy has to increasingly shift focus and respond to the threats to growth from this point onward.”

The Reserve Bank further said: ““Overall, recent inflation patterns and projections provide a basis for reinforcing our October guidance about policy easing in the fourth quarter. However, risks to inflation remain and accordingly, even as the policy emphasis shifts towards growth, the policy stance will remain sensitive to these risks.”

As per last week’s data, the annual rate of inflation based on wholesale price index has dropped to 7.24 per cent in November from 7.45 per cent in October 2012. But the growth in GDP has fallen from 5.5 per cent in the first quarter to 5.3 in the second.

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