The Reserve Bank of India has kept the key short term lending rate (repo rate) unchanged at 7.25%.
Following are the highlights of the mid-quarter monetary policy review:
* Cash reserve ratio too unchanged at 4 per cent
* Rupee fall, external sector risks and elevated food inflation areas of concern
* Continuing weakness in manufacturing needs to be urgently reversed
* RBI asks govt to create conducive environment for private investment, improve project clearances to promote growth
* Durable receding of inflation will open space for monetary policy action
* Reducing CAD is a challenge; RBI pitches for stable foreign inflows to finance it
* Steps to curb gold imports, easing commodity prices to lower CAD in 2013-14
* Balance of Payments, inflation and growth rate to determine future monetary stance
* Need to be vigilant about global uncertainty and its impact on capital flows
* RBI ready to use all available instruments to deal with any adverse development in external sector
* Positive rating action should have favourable impact on investor confidence
* First quarter review of policy on July 30.
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