Monetary Policy Review: RBI Keeps Rates Unchanged

NEW DELHI: In a somewhat more hawkish stance compared to June last, the half-yearly monetary policy review of the Reserve Bank of India has kept the policy rates unchanged. It did not announced any changed in the repo and reverse repo rates. The banks rates have also been kept unchanged at 6%. The CRR is up by 50 basis points to 7.5 %. RBI keeps the GDP forecasts unchanged at 8.5%. The inflation target for FY08 stand at 5%.

Emphasising, on the need to manage capital inflows, the Bank said .surplus liquidity needs to be handled as priority.. It further said that the money supply is expanding at 17-17.5%.

It also allowed oil companies to hedge forex exposure to 50% of the inventory.

The policy has taken a special note of the irregularities in banks’ real estate exposure..

Some highlights:

Deposit rate ahead of the four lakh cr target for FY08.

Currency markets see a tentative return to normalcy.