Reserve Bank of India (RBI) keeps key rates (CRR, Repo, Reverse Repo) unchanged in it’s Quarterly Monetary Policy Review.
The Governor of Reserve Bank of India (RBI) Mr. D. Subbarao kept policy rates unchanged at it’s quarterly monetary policy review on July 30, 2013 here in Mumbai.
The central bank left interest rates unchanged as it supports a battered rupee but said it will roll back recent liquidity tightening measures when stability returns to the currency market, enabling it to resume supporting growth.
Consequently, the key repo rate remains at 7.25 per cent while cash reserve ratio remains at 4 per cent. This will in all probability be the last policy review by the present governor as he demits office in September.
The pause in the easing cycle of the RBI set in motion in April 2012 continues. During the past one-and-half years, the RBI has cut rates by 1.25 per cent to a level of 7.25 per cent.
The RBI had taken a series of steps last fortnight which had the effect of tightening liquidity in order to curb speculation in the currency. These included raising the marginal standing facility rate (an emergency liquidity window) to 10.25 per cent as well as increasing the average daily cash reserve ratio requirement to 99 per cent of the total against 70 per cent earlier.
The RBI in its macro-economic report released on the eve of the policy review said that a weak currency and further fuel hikes have increased risks of higher inflation. While Wholesale price index (WPI) has come down to 4.86 per cent, consumer price index (9.87 per cent) has remained high.