In its Mid-Quarter Monetary Policy Review on the basis of the current macroeconomic assessment, the RBI decided to keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.25% of their net demand and time liabilities; and keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8%. Consequently, the reverse repo rate under the LAF will remain unchanged at 7%, and the marginal standing facility (MSF) and the Bank Rate at 9%.
Headline inflation has been below the Reserve Bank’s projected levels over the past two months. The decline in core inflation has also been comforting. These emerging patterns reinforce the likelihood of steady moderation in inflation going into 2013-14, though inflation may edge higher over the next two months........Read More