RBI hikes repo, reverse repo by 25 bps
The apex bank kept the GDP growth target unchanged at 7.5-8%. CRR rates were kept unchanged.
By Agencies |
MUMBAI: The Reserve Bank of India hiked reverse repo rate by 25 bps to 7%, repo rate by 25 bps to 6% while keeping the bank rates unchanged. In its "Macroeconomic and Monetary Developments: First Quarter Review 2006-07, the apex bank kept the GDP growth target unchanged at 7.5-8%. CRR rates were kept unchanged and the money supply growth target remained unchanged at 15%.
The central bank, noting that containing inflationary expectations would continue to pose a challenge, stated that its policy endeavour would be to contain YoY inflation rate for 2006-07 in the range of 5-to-5.5 per cent.
According to RBI, competitive pressures, corporate profitability and productive gains in several sectors have enabled corporates to absorb a part of the higher input costs into their profit margins.
"This has partially helped in abating the second-order effects of higher oil prices and contained manufactured products' inflation," the RBI said.
A feature of this quarter was that although fuel prices had been the key driver of domestic inflation, domestic petroleum products' prices still lagged the increase in international crude oil prices.
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