The Reserve Bank of India (RBI) in its monetary policy review meet today left interest rates unchanged as it sought to support 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.
Following are highlights from the monetary policy statement:
* Keeps repo rate unchanged at 7.25 percent.
* Reverse repo remains at 6.25 percent.
* Cash reserve ratio unchanged at 4.00 percent
* Keeps Marginal Standing Facility rate at 10.25 percent.
* Bank rate stands at 10.25 percent.
* Cash tightening steps to be rolled back in a calibrated manner as stability is restored in forex market
* Can revert to supporting growth with continuing vigil on inflation after reversal of cash tightening steps
* India’s external sector to remain vulnerable to confidence,sentiment in global financial markets
* Says economy’s resilience to shocks eroded as most external vulnerability indicators have deteriorated
* Persisting weakness in industrial growth has heightened risks to GDP growth,despite robust monsoon
* Cuts India GDP forecast for 2013/14 to 5.5 pct from 5.7 pct earlier
* Objective is to contain wholesale price inflation around 5 pct by March 2014