RBI governor maintains status quo on all policy rates

Reserve Bank of India (RBI) Governor Raghuram Rajan on Tuesday maintained the status quo on all the policy rates, adding that the success of the ongoing actions by the Centre in removing infrastructural constraints will be key in reviving growth.

"The government is comfortable with setting a four percent inflation target, plus/minus two percent beyond 2016. The central bank is planning to announce two key relaxations soon on restructuring to tackle financial stress. The sixth bi-monthly monetary policy statement is scheduled on February 3, 2015," Rajan said, while releasing the credit policy here.

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"Any change in monetary policy stance at the current juncture is premature. However, if current trend in fiscal developments and dis-inflationary pressure continue, we may lower policy rate early next year," he added.

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According to reports, in its fifth bi-monthly monetary policy released this morning, the RBI has kept the policy repo rate unchanged at eight percent and the cash reserve ratio (CRR) remains unchanged at four per cent. As a result, the reverse repo rate will remain unchanged at seven percent and the marginal standing facility (MSF) rate and the bank rate will remain at nine percent.

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The gross domestic product (GDP) growth target for the current fiscal year remains 5.5 percent, while the rate of inflation is expected to remain at around six percent for the next 12 months.