Though RBI Governor played safe keeping the CRR and repo rate undisturbed, the stock market took the shock in its chin as it was more or less anticipated.
However, the Bank Nifty was mauled as the bank stocks were pinning homes on moderation of interest rates in the wake of softening of inflation.
The RBI in its ‘Mid-Quarter Monetary Policy Review-June 2013’, said: “On the basis of an assessment of the current macro-economic situation’, it was decided to keep the cash reserve ratio (CRR) and the repo rate unchanged. The reverse repo rate as a consequence would also remain undisturbed.’’
While the CRR would remain at 4 per cent, the repo rate would remain the same at 7.25 per cent and the reverse repo rate will remain unchanged at 6.25 per cent and the bank rate at 8.25 per cent.
Looking ahead, the statement from the apex bank stated that its monetary policy stance “will be determined by how growth and inflation trajectories and the balance of payments situation evolve in the months ahead’’.
RBI said that it was “only a durable receding of inflation’’ which would open up the space for monetary policy to “continue to address risks to growth’’. While many steps had been initiated to hold in check the current account deficit, RBI wanted to be “vigilant about the global uncertainty, the rapid shift in risk perceptions and its impact on capital flows’’.
But the central bank said that it was “ready to use all available instruments and measures’’ to respond rapidly and appropriately against “any adverse developments’’.
While the BSE Sensex and Nifty did not show any great fall, the Bank Nifty took a knock, down by about 167 points.
The biggest lowers were SBI that was down by Rs 31.85 at Rs 2,014, ICICI Bank which was down by Rs 15.50 at Rs 1,086.65 and Axis Bank, which was down by Rs 23.80 at Rs 1274.20. All the 12 Bank Nifty stocks were in the red.