|
|
Reserve Bank keeps key rates unchanged
|
|
|
|
Top Stories |
|
|
|
|
SME Times News Bureau | 07 Apr, 2015
Country's central bank on Tuesday kept its key policy rates and the reserve
ratios unchanged in line with the predictions while awaiting more robust
data on inflation and action from commercial banks to soften their cost
of credit to alter its stance.
Reserve Bank of India Governor
Raghuram Rajan, who conducted the first bi-monthly review of the
monetary policy for the current fiscal year, decided to retain the
repurchase rate, the reverse repurchase rate, the cash reserve ratio and
the statutory ratio at existing levels.
He also projected a 7.8
percent growth for the current fiscal year, subject to a normal monsoon -
over which the RBI was worried - as also an inflation rate of 5.8
percent by the end of the year, after easing to around 4 percent by
August.
Rajan said the Reserve Bank adopted an accommodative
policy stance since January, ensuring comfortable liquidity in the
system. "Going forward, the accommodative stance of monetary policy will
be maintained, but monetary policy actions will be conditioned by
incoming data."
"For monetary transmission to occur, lending
rates have to be sensitive to the policy rate," Rajan said, while
expressing confidence that the Indian economy wil rebound, notably in
the manufacturing sector, while also nudging commercial banks to play
their part.
"The outlook for growth is improving gradually.
Comfortable liquidity conditions should enable banks to transmit the
recent reductions in the policy rate into their lending rates, thereby
improving financing conditions for the productive sectors of the
economy."
Accordingly, the repurchase rate and reserve repurchase
rate have been maintained at 7.5 percent and 6.5 percent respectively
while the cash reserve ratio and the statutory liquidity ratio have been
left untouched at 4 percent and 21.5 percent.
The repurchase
rate is the interest commercial banks pay for borrowing money from the
central bank to meet short-term fund requirements. The reverse
repurchase rate is the interest central bank pays when surplus
short-term funds are parked with it by commercial banks.
The cash
reserve and statutory liquidity ratios are the minimum mandated amounts
of money against the deposits that commercial banks have to retain in
the form of liquid assets. A change in this has a direct impact on the
money available to banks to extend loans and other advances.
The
RBI cut its repurchase rate by 25 basis points on January 15 and on
March 4. Accordingly, the reserve repurchase ratio also stood adjusted
by an equal margin. The cash reserve ratio has remained unchanged since
2013, while the RBI had brought down SLR by 50 bps in February 2015.
In January and March, when RBI cut its rates, banks did not reduce their base rates.
Meanwhile, markets which had factored in the possibility of an unchanged policy rates reacted negatively.
The 30-scrip BSE Sensitive Index (Sensex) plunged over 150 points just after the policy announcement was made public.
The
Sensex of the S&P Bombay Stock Exchange (BSE), which opened on
Tuesday at 28,582.33 points, was trading at 28,353.82 points (12.00
p.m.) in the morning trade session, down 150.64 points or 0.53 percent
from the previous day's close at 28,504.46 points.
The Sensex touched a high of 28,641.08 points and a low of 28,342.98 points in the intra-day trade so far.
|
|
|
|
|
|
|
|
|
|
|
|
|
Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
|
|
Daily Poll |
|
|
PM Modi's recent US visit to redefine India-US bilateral relations |
|
|
|
|
|
Commented Stories |
|
|
|
|
|
|
|
|