RBI governor Raghuram Rajan has kept the key interest rates unchanged, owing to the general elections to be held later during this year. The RBI has however indicated that all the lead indicators for the economy do not point to any kind of sustained revival.
Key rates unchanged
As the country is heading for the general elections this month, the Central bank, in an expected move, has retained the key interest rates unchanged during its Bi-monthly policy review. The Repo rate stands unchanged at 8%, while the Marginal Standing Facility (MSF) and the bank rate have also been left untouched at 9%. The CRR has been left at 4%, which has brought in a temporary relief for the Banking stocks.
RBI sounds hawkish ?
In a cautioury move, the RBI has sounded hawkish for the economic picture. The Central bank has felt that the growth story might be significantly affected if the Elections fail to produce a stable government at the centre.
The RBI has also opined that on the inflationary part – specifically on the vegetables segment. It feels that the vegetable prices have seen a seasonal trough, and thus any further softening would be unlikely for these items.
Nifty continues flat
Markets have seen no directional moves as the RBI has announced its decision to keep the rates unchanged. The bourses were largely expecting a similar move from the Central bank.