India Monetary Policy Review – June 2013
In its mid quarter Monetary policy review, the Reserve Bank of India held its benchmark Repo rate at 7.25% and the Reverse Repo rate at 6.25%. The RBI expressed concern at the sudden, steep depreciation in the Rupee amid a high current account deficit.
- At its Mid Quarter Monetary policy review on the 17th of June, the Reserve Bank of India (RBI) maintained the benchmark repo rate at 7.25%, and the reverse repo rate at 6.25%.
- The Cash Reserve Ratio (CRR) was held at 4%, and the Statutory Liquidity Ratio (SLR) was maintained at 23%.
- The RBI expressed concern at the sudden, steep depreciation in the Rupee amid a high Current account deficit: key factors impacting its interest rate decision.
- It also highlighted high food and administered price rises, which when combined with a weaker rupee, could generate second-round inflation effects.
- This is against a backdrop of falling wholesale and core inflation, as well as soft activity indicators.
- On a more positive note, ratings agency Fitch has upgraded India’s outlook to stable on an improved fiscal outcome and some progress on tackling structural problems in the economy.
- Further cuts to the repo rate will depend on a more sustained decline in inflation: a more stable rupee, a contained current account deficit and a moderation in food price inflation.
For further analysis download the full report.
India Monetary Policy Review – June 2013 (PDF 333 KB)
About the Author
NAB’s Group Economics consists of a leading team of economists who provide accurate, timely and relevant updates on domestic, international and industrial economic trends.
Headed up by the Group Chief Economist, Alan Oster, the team is comprised of three distinct departments:
- Australian economics and commodities
- International economics
- Industry economics
The team publish a wealth of content including reports, surveys, forecasts and indexes.
