Today, Raghuram Ranjan Governor of Reserve Bank of India has kept interest rate unchanged, saying that a shift in stance is ‘premature’ but hinted that a cut may come early next year if inflation continues to ease and government acts on the fiscal side.
The discussed highlights of the of RBI’s bi-monthly monetary policy statement are:
- Short-term lending (Repo) rate unchanged at 8 per cent.
- Cash reserve ratio (CRR) unchanged at 4 per cent.
- Statutory Liquidity Ratio retained at 22 per cent to unlock banking funds.
- GDP growth for current fiscal estimated at 5.5 per cent.
- Projects retail inflation at 6 per cent by March 2015-end.
- Projects retail inflation to lower in November, rise again in December.
- Says change in monetary policy stance at the current juncture is premature.
- Hints at lowering policy rate early next year if fiscal, inflation conditions improve.
- Weak revenue realisation a threat to fiscal deficit target.
- Next bi-monthly policy statement on February 3.
