Highlights of RBI monetary policy statement on Aug 4

Following are the highlights of the third bi-monthly monetary policy statement by the RBI:

* Key policy rate (repo) kept unchanged at 7.2 per cent;

* Cash reserve ratio (CRR) unchanged at 4 per cent;

* Economic recovery is still work in progress;

* After strong rainfall in June, July has been below par, but overall monsoon is near normal;

* Most worrisome is sustained hardening of inflation except food and fuel;

* Signs that consumption demand, especially in urban areas, is picking up;

* Weak global demand conditions restrained exports;

* Banks have passed on an average 0.3 per cent interest rate cut as against RBI’s 0.75 per cent rate cut since January;

* New investment demand emanating from private sector and government remains subdued;

* The RBI retains growth target at 7.6 per cent for 2015—16;

* Capital infusion into PSBs will help loan growth and transmission;

* Fourth bi-monthly monetary policy to be announced on September 29.