RBI keeps Repo rate at 8% with steady CRR at 4.25%

Maintaining the status quo is something the Reserve Bank of India (RBI) knows all too well. The Indian central bank kept key policy rates unchanged during the latest monetary policy review. The repo rate was maintained at 8%, Cash Reserve Ratio (CRR) stood steady at 4.25%. Headline inflation came down to 7.2% in November, but this wasn't enough to impress the governor, D Subbarao. He maintains that risks to inflation still remain and emphasised the need to shift increasingly towards growth. The RBI has been facing pressure from the government and the industry to cut rates. A monetary cut at this rate would help improve sentiments and help revive g rowth. However, all hope is not lost. There is an indication that rates may get cut January onwards. The slowdown may have bottomed out and inflation is moderating. A rate cut in early 2013 will just be the icing on the cake.