MUMBAI, Dec 18: The Reserve Bank of India (RBI) today kept the ket rates steady despite calling current inflation too high, citing the prospect of easing retail prices and its concerns about the weak domestic economy.
Announcing the Mid Quarter Review of Monetary policy today, RBI Governor Raghuram Rajan said the policy decision is a close one.
Current inflation is too high.
On the basis of an assessment of the current and evolving macroeconomic situation, the RBI has kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 7.75 per cent; and cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand ant time liability (NDTL).
Consequently, the reverse repo rate under the LAF will remain unchanged at 6.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 8.75 per cent.
It would remain vigilant on inflation and that it would be ready to act even in between policy reviews should headline or core inflation not ease as expected, albeit in a ‘calibrated’ manner, Mr Rajan said.
It would gauge the impact of any decision by the US Federal Reserve to withdraw its monetary stimulus. The US central bank concludes its policy meeting later in the day, it added. (AGENCIES)
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