The Reserve Bank of India has kept the key rates, including Cash Reserve Ratio, Repo Rate and Reverse Repo Rate unchanged in its Credit Policy announced on Tuesday.
The repo rate, at which the central bank lends cash to banks, stays at 4.75 per cent, which is its lowest in 9 years, and the reverse repo rate, at which it absorbs surplus cash from the banking system, is steady at 3.25 per cent. The Cash Reserve Ratio has been kept untouched at 5 per cent.
RBI has increased the inflation forecast to 5 per cent from 4 per cent. The deposit growth is seen at 19 per cent and the review has said that there is scope for the banks to cut interest rates. The Statutory Liquidity Ratio also remains unchanged at 24 per cent.
The Central Bank has, however, increased its growth projections for Fiscal 2009-2010 by projecting the GDP at 6 per cent.
The Reserve Bank has also kept flexibility to conduct repo and reverse auctions at a fixed rate or at variable rates as circumstances warrant.
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