RBI’s monetary policy review: key rates unchanged

All eyes are on Reserve Bank of India’s mid-quarter review of monetary policy today, expected that due to inflation chances of key interest rates to be remained unchanged in the policy review.

The repo rates and reverse repo rate remains unchanged at 8 per cent and at 7 per cent.

While experts indicated, govt is likely choose cut the cash reserve ratio (CRR), the portion of deposits banks have to mandatory park with RBI unchanged at 4.25 per cent that help to tighten the liquidity.

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

With more disappointment to the RBI move, Sensex reacted negatively. There is no change in CRR and the Governor would not cut rates before January. The banks’ borrowing from the RBI has raise to Rs 1,46,300 crore from Rs 64,445 crore.

Just after policy released, the Bombay Stock Exchange grounded with 150 points to 19,149 from 19,302 points today morning.

The Inflation rate is at its 10-month low of 7.24 percent in November, much above the central bank’s comfort level of 4-5% and much expectation were from RBI to cut interest rates or CRR that could come down by about 25 basis points.

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