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Our Bureau

Thiruvananthapuram, April 24

The Reserve Bank of India may have just made a tactical retreat in leaving all key policy-setting rates unchanged and maintaining a status quo on its monetary policy stance for the time being. According to Mr Amit Tandon, Managing Director, Fitch Ratings, the Reserve Bank has `paused' its recent rate hikes with a `wait and watch' policy. The policy reiterates that inflation targeting remains a priority, but growth is important as well. Mr Tandon observed that the RBI's announced move to permit Single-entity Credit Default Swaps (CDS) is an important milestone in the development of the debt market.

According to Mr Dharmakirti Joshi, Director and Principal Economist, Crisil, the Reserve Bank has hit the pause button on monetary tightening but aggressively targeted inflation for 2007-08 at 5 per cent. It would, however, be too early to interpret the latest move as the end of the tightening cycle.

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