Weighed down by a weak rupee, the Reserve Bank on Tuesday chose to keep all key interest rates unchanged and asked the government to take urgent steps to reign in the high current account deficit.
Following are the highlights of RBI's first-quarter monetary policy review:
Key short term lending rate (repo rate) kept unchanged at 7.25%
Cash reserve ratio too unchanged at 4 per cent
Cuts GDP forecast for FY'14 to 5.5 pc from 5.7 pc earlier
Rupee depreciation a threat to inflation
Tight liquidity measures to be rolled back once Rupee stabilises
To use all instruments to keep March-end inflation at 5 pc
Policy measures aimed at addressing risks to macroeconomic stability from external sector,
Biggest threat to macroeconomic stability stems from the external sector
Immediate structural steps needed to contain the current account deficit
International crude oil prices are firming up
Growth, inflation to determine future policy actions
This is RBI Governor D Subbarao's last policy before expiry of his five year term
Next mid-quarter review of policy on September 18; second quarter policy review on October 29.