RBI to decide on bank rate after Budget
Reserve Bank of India will take a view on further revising interest rate only after presentation of the Union Budget on February 28.
"Let's wait. Let's see what happens (in the Budget)," RBI Governor Bimal Jalan said on Friday when asked about RBI's decision on interest rate revision in case small savings rates are reduced in the forthcoming Budget.
The RBI chief, who was in New Delhi for the release of a book by I G Patel, told reporters that the central bank still maintains its stance of ensuring "soft interest rate regime" to continue, which is also indicative that the central bank could reduce the rates further in the near future.
Last year, RBI had slashed rates a day before the Budget presentation and then again in March first week following a reduction in small savings rates by the government.
The bank rate (the rate at which banks obtain refinance from the central bank) was further slashed by 0.5 per cent to 6.5 per cent in Busy Season Credit Policy in October. Cash Reserve Ratio was also cut by two per cent to 5.5 per cent.
Despite the bank rate cut to lowest ever level since May 1973, commercial banks did not slash prime lending rates till now.
The RBI governor declined to comment on the falling rupee, which almost breached Rs 49 to a dollar but closed at Rs 48.75. "I don't comment on the rupee," Jalan said.
Jalan, however, expressed satisfaction at the forex reserves of almost $50 billion.
"In the last three years, we have more than doubled it," he added.
Forex reserves stood at $49.77 billion during the week-ended February eight, which was up by$201 million in a week's time.
"The international consensus is that you must have high level of reserves to take into account any liquidity problems.
We will take into account all eventualities, all problems and all difficulties and all uncertainties. We are absolutely safe," he said.
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