FIRST QUARTER REVIEW OF MONETARY POLICY 2013-14 , RESERVE BANK OF INDIA

RBI KEEPS KEY INTEREST RATES UNCHANGED, CUTS GDP FORECAST FOR FY'14 TO 5.5%

           The Reserve Bank of India has decided to keep all the key rates unchanged in its first quarter monetary policy review for 2013-2014 today. The repo rate has been kept unchanged at 7.25 per cent. Consequently, the reverse repo rate will remain unchanged at 6.25 per cent, and the marginal standing facility (MSF) and the Bank Rate at 10.25 per cent. The cash reserve ratio of scheduled banks has been retained at 4 per cent of their net demand and time liabilities.

           The RBI has revised the growth projection for 2013-14 downwards from 5.7 per cent to 5.5 per cent. The RBI has stated that the biggest risk to the macroeconomic outlook stems from the external sector and the monetary policy’s stance is intended to address these risks from external shocks. The RBI has also said that its recent liquidity tightening measures are aimed at checking undue volatility in the foreign exchange market and will be rolled back in a calibrated manner as stability is restored to the foreign exchange market.

              The RBI has stated that depreciation in rupee is expected to put pressure on inflation, but it will deploy all instruments in its command to keep inflation at 5 per cent by March. Today's monetary policy review is the last for RBI Governor Duvvuri Subbarao, whose term will end in early September, unless it is extended.

The next mid-quarter review of monetary policy for 2013-14 will be put out on September 18, 2013. The second quarter monetary policy review for 2013-14 is scheduled on October 29, 2013.

CURRENT RATES
POLICY RATES	BANK RATE	10.25 %
	REPO RATE	7.25 %
	REVERSE REPO RATE	6.25 %
	MARGINAL STANDING FACILITY RATE	10.25 %
RESERVE RATIO	CRR	4 %
	SLR	23 %
LENDING RATE	BASE RATE	9.70 %  -  10.25 %