MUMBAI, July 30: True to market and industry expectations Reserve Bank of India kept its key rates unchanged.
RBI governor, D Subbarao in his first quarter review said India is currently
caught in a classic ‘impossible trinity’ trilemma whereby ”we are having to forfeit some monetary policy discretion to address external sector concerns”.
The RBI kept Repo rate at 7.25 and Reverse Repo rate at 6.25 pc.
Even CRR kept unchanged at 4 pc.
He said the recent liquidity tightening measures by the Reserve Bank are aimed at checking undue volatility in the foreign exchange market and will be rolled back in a calibrated manner as stability is restored to the foreign exchange market, enabling monetary policy to revert to supporting growth with continuing vigil on inflation”.
He said the time available now should be used with alacrity to institute structural measures to bring the Current Account Deficit down to sustainable levels.
He asserted that the RBI was ready to use all available instruments and measures at its command to respond proactively and swiftly to any adverse development over the next quarter. (UNI)
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