The Hindu Business Line : Key interest rates unchanged

IN its first quarterly review of the Monetary Policy, the Reserve Bank of India has left key parameters — bank rate, repo rate, and cash reserve ratio — unchanged.

According Dr Y.V. Reddy, RBI Governor, the current assessment of the macroeconomic outlook and the overall policy stance remain broadly unchanged from the annual policy statement in April.

"In April we had identified two challenges: how to handle inflationary expectations and how to manage liquidity given the competing consideration of government borrowing programme and the credit growth. A measure (0.25 per cent hike in reverse repo rate) that was taken at that time had good effect," Mr Reddy said at a press conference explaining the stance of the first quarterly review of the Monetary Policy.

However, there are global uncertainties, the most important being oil prices. "We will be watching the evolving circumstances and reaction will be prompt," he said.

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