RBI leaves key rates unchanged

Mumbai, Jan 29 : The Reserve Bank of India (RBI) has kept key interest rates, including bank rate, reverse repo rate, repo rate and Cash Reserve Ratio (CRR), unchanged in its third quarter review of the credit policy for 2007-08 presented today.

While the bank rate has been left unchanged at six per cent, the reverse repo rate and the repo rate also stay intact at six per cent and 7.75 per cent, respectively.

The CRR too was left unchanged at 7.5 per cent.

The policy actually leaves flexibility to change repo and reverse rates in the near future.

The review retained the overall real GDP growth projection for 2007-08 at around 8.5 per cent.

"The policy endeavour would be to contain inflation close to 5 per cent in 2007-08, while conditioning expectations in the range of 4-4.5 per cent," the RBI said.

The RBI's review is driven by liquidity management and move to maintain price stability.

"Liquidity management will assume priority in the conduct of monetary policy through appropriate and timely action," it said.

Barring the emergence of any adverse and unexpected developments in various sectors of the economy and keeping in view the current assessment of the economy including the outlook for growth and inflation, the overall stance of monetary policy in the period ahead will broadly continue to be to reinforce the emphasis on price stability and well-anchored inflation expectations, while ensuring a monetary and interest rate environment conducive to continuation of the growth momentum and orderly conditions in financial markets.

The review said the policy will emphasise credit quality as well as credit delivery, in particular, for employment-intensive sectors, while pursuing financial inclusion, besides monitoring the evolving heightened global uncertainties and domestic situation impinging on inflation expectations, financial stability and growth momentum in order to respond swiftly with both conventional and unconventional measures, as appropriate.

ANI