India's central bank, the Reserve Bank of India (RBI), in its mid quarter monetary policy review on Tuesday has kept CRR, repo and reverse repo rate unchanged. The market was expecting 25 bps rate cut in CRR to improve liquidity in the banking system.
Vaibhav Agrawal, VP Research-Banking, Angel Broking, said, 'The markets were expecting at least a CRR cut so to that extent the policy was a bit of a disappointment. But the tone of the RBI has increasingly shifted towards supporting growth rather than focusing purely on inflation management. Also, the policy has also reinforced its guidance on easing in the fourth quarter, so that should appease markets to an extent. Going ahead, softening commodity prices along with a high base are likely to lend a positive bias on bringing down headline inflation. Overall, the broader point is that interest rates look to have peaked and with the possibility of FY2014 GDP growth being better than FY2013 as well as healthy global liquidity, the outlook for markets remains decent.'
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