RBI maintains status quo on interest rates 05/08/2014

RBI maintains status quo on interest rates
05/08/2014 17:05
As expected, the Reserve Bank of India (RBI) kept its key benchmark rates unchanged as the central bank continues its focus on bringing down inflation to comfortable levels in Asia’s third biggest economy. The RBI left its key repo rate unchanged at 8 per cent on Tuesday. The apex bank had raised the repo rate by 25 basis points in January. While consumer price inflation fell to 7.3 per cent in June 2014 from 8.3 per cent in the previous month, the RBI warned over upside risks to inflation amid a deficient monsoon and geopolitical risks such as the crisis in Iraq and Ukraine. The RBI hopes to achieve the inflation target of 6 per cent by January 2016. “The upside risks to the target of ensuring CPI inflation at or below 8 percent by January 2015 remain, although overall risks are more balanced than in June," Governor Raghuram Rajan wrote in the RBI statement on its policy review. "It is, therefore, appropriate to continue maintaining a vigilant monetary policy stance as in June, while leaving the policy rate unchanged." In a bid to boost lending, the RBI cut the SLR rate or the minimum bond holding requirements for banks, by 50 basis points to 22 per cent of deposits, effective from August 9, 2014.

RBI likely to slash interest rates by 25 bps: Assocham survey 02/06/2014

RBI likely to slash interest rates by 25 bps: Assocham survey
02/06/2014 12:16
In the first credit policy review after the Narendra Modi-led government assumed charge, Reserve Bank of India on Tuesday is likely to cut rates by 25 basis points as governor Raghuram Rajan tries to strike a balance between fighting inflation and reviving growth, says an Assocham poll, reported PTI. "A small, though symbolic cut in interest rates of say, 25 basis points, looks on cards," the survey of economists and CEOs said. "While the RBI is an autonomous central bank and the monetary policy is its sole prerogative, it is expected by a large number of corporate leaders and economists that the central bank chief would show much more pragmatism," Assocham said. According to the media report, around 76 per cent of the respondents in the 125-sized sample survey said that RBI Governor Raghuram Rajan is walking a tight rope as he "knows the mind" of the new government, which has been projected as pro-growth. "The RBI governor's job would become much easier as he along with others can see much higher level of commitment to reduce the inflation, both at the whole-sale price inflation (WPI) and retail level," Assocham President Rana Kapoor said. India's economic growth has remained below the 5 per cent mark for the second year in a row at 4.7 per cent in 2013-14. While industrial production shrank for the second month in a row, contracting 0.5 per cent in March, retail inflation surged to a three-month high of 8.59 per cent in April.