The Reserve Bank of India has decided to keep all the key rates unchanged in its mid-quarter policy review today. The repo rate has been kept unchanged at 8 per cent and the cash reserve ratio has also been kept unchanged at 4.25 per cent. Consequently, the reverse repo rate will remain unchanged at 7 per cent, and the marginal standing facility (MSF) and the Bank Rate at 9 per cent.

The Reserve Bank has said that in view of inflation pressures ebbing, monetary policy has to increasingly shift focus and respond to the threats to growth from this point onwards. The RBI has said that liquidity will be managed to support growth.GDP growth is evolving along the baseline projection of 5.8 per cent for 2012-13. The headline WPI inflation has edged down to 7.2 per cent in November, however inflation may edge higher over the next two months. The RBI will update its forecast for FY13 growth and inflation in the quarter ending December 31, 2012.

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