Indian Central Bank Holds Key Rate, Reserve Ratio

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The Reserve Bank of India decided to leave its key interest rates and cash reserve ratio unchanged on Tuesday.

The central bank maintained the repo rate at 4.75% and the reverse repo rate at 3.25%. RBI also left the cash reserve ratio unchanged at 5%.

The central bank raised its WPI inflation forecast for end-March 2010 to around 5% from its earlier projection of 4%, keeping in view the global trend in commodity prices and the domestic demand-supply balance.

In its First Quarter Review of Monetary Policy 2009-10, RBI Governor Duvvuri Subbarao said the immediate challenge for the Reserve Bank is to manage the balance between the short-term compulsions of providing ample liquidity and the potential build-up of inflationary pressure on the way forward.

The Reserve Bank of India decided to leave its key interest rates and cash reserve ratio unchanged on Tuesday. (Market News Provided by RTTNews)