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Following are the highlights of RBI’s mid-quarter review of monetary policy ( >Full story ):
* RBI keeps key policy rate, cash reserve ratio unchanged
* Repo rate unchanged at 7.75%; cash reserve ratio unchanged at 4%
* RBI to wait for more data before taking policy action
* Outlook on global growth continues to remain moderate
* Volatility in the financial markets could pick up following the inevitable taper of the quantitative easing in the US
* Lacklustre indicators on services and subdued domestic consumption point at continuing headwinds to growth
* Expenditure cuts by Govt will only add to the pressures on the growth front
* Revival of stalled investments crucial for growth
* High inflation numbers risks entrenching inflation expectations at unacceptably elevated levels
* High and persistent inflation also increases the risks of exchange rate instability.
* RBI expects inflation to be contained on vegetable prices going down sharply
* Current inflation is high but its trajectory is uncertain and there is merit waiting for more data.
* RBI to be vigilant and will act between scheduled policies if expected softening in food prices does not materialise.
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