RBI in its mid quarter review of monetary policy for 2013-14 has kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 7.75% and the cash reserve ratio (CRR) of scheduled banks unchanged at 4% of net demand and time liability (NDTL).
Consequently, the reverse repo rate under the LAF will remain unchanged at 6.75% and the marginal standing facility (MSF) rate and the Bank Rate at 8.75%.
The headline inflation has increased on account of jump in the food prices. While inflation excluding food and fuel have been stable, asserts Mr. Khaitan
Rising inflation needs to be tackled at grass root level as there exists enough agricultural production to serve food demand in the economy but the delivery from the farm gate to consumer doorstep is problematic in terms of various hurdles in the supply chain management, he said
Going ahead, we believe food inflation should also come under control vis-à-vis bumper crop production this year and that would pave the way for turnaround in the economy and help macro-economic environment to stabilize and growth to consolidate, going forward, he added.