RBI keeps key rate unchanged, awaits data on development of inflation

By FXStreet FXStreet (Mumbai) – The Reserve Bank of India (RBI) made no changes to its monetary policy settings, leaving the benchmark interest rate unchanged at 6.75%.

Key Points from the policy statement:

Continues to be “accommodative” even as it leaves rates unchanged, awaits data on development of inflation

Structural reforms in budget, controlling spending will create more space for monetary policy to support growth

Assuming normal monsoon rain, inflation seen around 5 pct by 2016/17 end, not factored in pay commission impact

Projects economic growth at 7.6 pct for 2016/17 fiscal year and 7.4 pct with downward bias for 2015/16

Decline in Oil prices may impact flow of remittances from the gulf

Underlying growth drivers, particularly private investment need to be revived

While the central bank Chief Rajan noted, “will ensure liquidity is plentifully supplied through open mkt ops.”
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Source:: FX Street