Tuesday 1 April 2014

Monetary policy review: RBI holds key rates


RBI keeps reverse repo rate unchanged at 7 per cent. RBI keeps short-term lending (repo) rate unchanged at 8 per cent. Cash reserve ratio too unchanged at 4% .RBI pegs growth for 2014-15 at 5.5 per cent.Current account deficit expected to come down to 2 per cent of GDP in 2013-14.

In the first bi-monthly monetary policy statement for 2014-15, RBI Governor Raghuram Rajan decided to pause and not disturb status quo. The repo rate, the central’s bank main policy rate and the rate at which it lends money to banks, remained at 8 per cent. Other policy instruments such as cash reserve ratio also remain unchanged at 4%.

The RBI has decided to increase the liquidity provided under 7-day and 14-day term repos from 0.5 per cent of Net demand and term liabilities (NDTL) of the banking system to 0.75 per cent, and decrease the liquidity provided under overnight repos under the LAF from 0.5 per cent of bank-wise NDTL to 0.25 per cent with immediate effect.

No comments:

Post a Comment