TOP STORIES

Srirangam: The heat is on

The picture is clear now. As many as 34 candidates are in the fray in Srirangam, which is facing...... Read More >>

Umashankar has no real case

Controversial IAS officer C Umashankar may be brazening it out that he will move the courts...... Read More >>

Corpn going all out to tackle mosquito menace

The mosquito menace dominated the Chennai Corporation Council today with various steps being...... Read More >>

Prince of Arcot praises Obama

Prince of Arcot Nawab Mohammed Abdul Ali has hailed the US President Barrack Obama's parting...... Read More >>

Reunion time for Vidyodaya girls

It was reunion time for past students of Vidyodaya Schools in Chennai as over 300 attended the...... Read More >>

MOST POPULAR

VIDEO

RBI keeps rates unchanged, unlocks Rs 40,000 cr of bank funds

Tuesday, 3 June 2014
PTI

Committed to keep inflation under  check, RBI Governor Raghuram Rajan today left key rates unchanged and unlocked about Rs 40,000 crore of funds by reducing the amount of deposits banks are required to park in government securities.

This is the second time in a row that interest rates have  been left unchanged amid demands for moderation to spur growth.

The repo rate, at which the Reserve Bank of India lends to banks, has been retained at 8 per cent, while the statutory liquidity ratio (SLR) for banks has been cut by 0.5 per cent to 22.5 per cent with effect from June 14.

The cash reserve ratio for banks has been kept unchanged at 4 per cent.

"At this juncture, it is appropriate to leave the policy rate unchanged, and to allow the disinflationary effects of rate increases undertaken during September 2013-January 2014 to mitigate inflationary pressures in the economy," Rajan said while unveiling the Second Bi-Monthly Monetary Policy Statement for 2014-15.

Consumer price index (CPI) inflation, excluding food and fuel, has moderated gradually since September 2013 although it is still elevated, he said.

Rajan, who has increased the repo rate thrice since September, said no more tightening would be warranted if the economy stays on a disinflationary course. He added that the RBI may also consider a cut if the disinflation process is faster than anticipated.

Rajan reiterated the RBI's commitment to its target of getting CPI inflation, which accelerated to 8.59 per cent in April, down to 8 per cent by January 2015 and 6 per cent by the year after.

On growth, Rajan maintained the RBI's median estimate of GDP expansion coming in at 5.5 per cent for this financial year.


      

Today's E-Paper

Polls