The Reserve Bank of India today maintained
a status quo by not revising the repo rate or the cash reserve ratio but turned
unexpectedly dovish which made the slide
below the psychological level of 60/dollar, for the first time since July 9.The liquidity tightening steps of the central bank which were unleashed a fortnight back were able to halt the sharp depreciation of the currency.
The central bank kept the March end inflation forecast unchanged at 5%, while cut GDP growth forecast for 2013-14 to 5.5% from 5.7% projected in May.
In the post policy press meet RBI governor Subbarao acknowledged that while there was a strong case for further policy easing as growth has moderated more than expected but an uncertain external sector prevented in taking such a step. After cutting the key policy rate by 75 bps cumulatively on three consecutive occasions, RBI held the rate in the June policy.
