RBI keeps key rates unchanged

The Reserve Bank of India on Tuesday left its policy interest rate unchanged, as expected, and said it does not expect further near-term policy tightening if headline inflation continues to ease towards the bank's targeted level.

The RBI kept its key repo rate at 8.00 per cent, in line with the forecast of all 53 economists in a Reuters poll last week.

Since taking office in September, RBI Governor Raghuram Rajan has raised the repo rate three times by a total of 75 basis points.

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India's consumer price index inflation eased to 8.1 per cent in February, near the RBI's January 2015 target of 8 percent, while the wholesale price index slowed to a 9-month low of 4.68 per cent.

The RBI wants CPI inflation to ease further to 6 per cent by January 2016.

"If inflation continues along the intended glide path, further policy tightening in the near term is not anticipated at this juncture," Rajan said in his policy statement.

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Here are the highlights of the RBI's policy:

• RBI pegs growth for 2014-15 at 5.5 per cent;
• Current account deficit expected to come down to 2 per cent of gross domestic product in 2013-14;
• The central bank expects retail inflation to be under 6 per cent during 2014;
• It asks banks not to charge penalty from depositors for failure to maintain minimum balance in inoperative accounts;
• RBI will announce in-principle approval of new bank licences after consulting Election Commission;