RBI keeps status quo, banks may raise rates

Jul 31, 2013 - HC: Why isn’t delhi top cop accountable? |

Age Correspondent

The Reserve Bank of India on Tuesday left key policy rates unchanged, but top bankers said they might have no choice but to raise interest rates after about a month.

RBI governor D. Subbarao, announcing the first quarter review of monetary policy for 2013-14, said the RBI had lowered policy rates by 1.75 per cent last fiscal but the banks had not passed on most of this benefit to borrowers, and had enough cushion while lending.
The case for easing policy rates, he said, was overtaken by the need to respond to the global financial turmoil and the attack on the rupee.
The greatest risk to the economy, he stressed, came from external factors, suggesting that the government take steps to reduce the current account deficit as it cannot depend on capital inflows. Volatility in exchange rates could be contained, the RBI chief felt, if the government sent out a serious signals on increasing exports.

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