RBI’s Raghuram Rajan holds ground, leaves repo rates unchanged: Highlights

RBI Governor Raghuram Rajan today kept interest rate unchanged, saying that a shift in stance is ‘premature’ but hinted that a cut may come early next year if inflation continues to ease and government acts on the fiscal side.

Following are the highlights of RBI’s bi-monthly monetary policy statement:

* Short-term lending (Repo) rate unchanged at 8 per cent.

* Cash reserve ratio (CRR) unchanged at 4 per cent.

* Statutory Liquidity Ratio retained at 22 per cent to unlock banking funds.

* GDP growth for current fiscal estimated at 5.5 per cent.

* Projects retail inflation at 6 per cent by March 2015-end.

* Projects retail inflation to lower in November, rise again in December.

* Says change in monetary policy stance at the current juncture is premature.

* Hints at lowering policy rate early next year if fiscal, inflation conditions improve.

* Weak revenue realisation a threat to fiscal deficit target.

* Next bi-monthly policy statement on February 3.