RBI decided to leave the key benchmark rates unchanged in its monetary policy review.

While the rain Gods have blessed us more than adequately, the risks to growth continue to increase. On one hand there are issues for growth. On the other hand, there is the Indian Rupee which has been steadily falling. As a result, the job of the Reserve Bank of India (RBI) has become even tougher. With external stability taking precedence, the RBI decided to leave the key benchmark rates unchanged in its monetary policy review today. As such the repo rate and cash reserve ratio (CRR) currently stand at 7.25% and 4% respectively.

The point of concern however was that RBI continued to raise concerns over growth. In this regard, it has revised its FY14 GDP projection downwards to 5.5% from the earlier 5.7%. In its opinion the onus for reversing the slowdown lies on the government. The RBI has urged the government to take the necessary steps for reigning in the current account deficit and stabilization of the Rupee are the two most important things to consider. These are structural issues that need to be fixed up if RBI is expected to reverse its hawkish stance.