The
RBI has left the key interest rates unchanged in its monetary policy review on yesterday.
While
the repo rate has been left unchanged at 8 percent, the reverse repo rate has
been adjusted to 7 percent. The RBI also keeps the CRR unchanged to 4 per cent.
Since
most analysts predicted a status quo in view of the macro-economic data and
inflation, the central bank’s action is on the expected lines.
RBI
Governor Raghuram Rajan while announcing the policy statement said that the
only surprising thing today in the monetary policy is lack of surprise. He said
that the central bank’s policy is firmly focused on curbing inflation.
The
Governor said “the Reserve Bank’s policy stance will be firmly focussed on
keeping the economy on a disinflationary glide path that is intended to hit 8
percent CPI inflation by January 2015 and 6 percent by January 2016”.
He
also said that it is appropriate to hold the policy rate at the present time
while allowing the rate increases taken during September 2013 to January 2014
to work their way through the economy.
He said if inflation
continues to go along the projected line then further policy tightening is not
likely in near term at this juncture.
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