RBI keeps all key rates unchanged

• The Reserve Bank of India on Tuesday ,29 th January 2008 kept all key rates unchanged - a move that could dash hopes of any cut in lending rates by banks.
• Reviewing its monetary policy, the apex bank stuck to its projection of economic growth at 8.5 per cent, while declaring that the policy mechanism would endeavour to contain inflation rate close to five per cent in the current financial year.
• The cash reserve ratio stays and the CRR repo and reverse repo rates as well as the bank rates remain unchanged. The policy actually leaves flexibility to change repo and reverse rates in the near future. The Reverse repo rate stays at 6 per cent and CRR at 7.5 per cent. The inflation target for 07-08 also remains at 4 to 4.5 per cent levels and 3 per cent in medium term.
• The fact that RBI did not go in for sucking out liquidity from the banking system gives the comfort feeling that inflation is manageable.