RBI Policy Review - December 2014

Key Rates

i. Governor Raghuram Rajan-led Reserve Bank of India (RBI) today kept key policy rates unchanged.

ii. RBI holds key rates again in the policy review.

iii. Rajan has said that he will not hold rates for longer than needed.

iv. Central bank governor remains wary of factors outside his control, like volatile oil prices, even with the inflation rate running below the RBI’s target of 6 percent inflation by January 2016.

v. Helped by tumbling oil prices, India’s annual consumer price inflation slowed to 5.52 percent in October, sharply down from a peak of 11.16 percent struck in November last year.

vi. The government is also expected to amend the RBI Act to incorporate a monetary policy committee that gives voting rights to officials both within and outside the central bank.

vii. Friday’s data showed year-on-year growth slipped to 5.3 percent in theJuly-September quarter, down from 5.7 percent in the previous quarter.