29 Apr 2008 | 12:07
RBI keeps interest rates unchanged
The Reserve Bank of India (RBI) in its annual monetary policy announced today kept interest rates unchanged. The central bank, however, raised the cash reserve ratio (CRR) by 25 basis points to 8.25% with effect from 24 May 2008. The CRR is the percentage of banks' deposits which they must keep as cash with the central bank. It may be recalled that RBI had earlier this month announced a two-stage rise in CRR to 8%.
The Reserve Bank of India (RBI) said managing liquidity would continue to receive priority in its policy objectives and warned it would act swiftly to curb any signs of adverse developments in inflation expectations.
RBI has forecast economic growth of 8% to 8.5% in the fiscal year that began this month, after an estimated 8.7% growth in 2007/08. RBI said it aims for inflation of around 5.5% this fiscal year with the goal of lowering it close to 5% as soon as possible.
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