The Reserve Bank of India on Tuesday kept the bank rate untouched at six per cent but raised the repo rate by 0.25 per cent to 4.75 per cent effective from Wednesday.
The economic growth for the current fiscal has been scaled down to 6-6.5 per cent from 6.5-7 per cent, the RBI said in its mid-term review of annual policy.
Highlights of the Monetary and credit Policy
RBI cuts growth estimates to 6.5%
The inflation estimate has been raised to 6.5 per cent from the earlier five per cent.
In its mid-term policy review, the RBI said it would pursue an interest rate environment that is conducive to macro-economic growth and price stability and maintaining the momentum of growth.
The overall stance of the monetary policy for 2004-05 would be provision of appropriate liquidity to meet credit growth and support investment and export demand in the economy while placing equal emphasis on price stability.
The RBI said banks have been allowed to fix the ceiling on interest rates on FCNR(B) deposits on a monthly basis.
The minimum tenor of the retail domestic term deposits has been reduced to seven days, it added.
The limits on advances under priority sector have been enhanced for improving credit delivery to the agriculture sector, the RBI said.