New Delhi: The Reserve Bank of India on Wednesday chose to keep its key policy rates unchanged in the mid-quarter monetary policy review.
On Wednesday, the RBI kept its policy repo rate unchanged at 7.75 per cent; and the cash reserve ratio (CRR) unchanged at 4.0 per cent of net demand and time liability (NDTL).
With no change in key policy rates, banks are expected to keep deposit and lending rates unchanged - meaning no immediate hike in consumer loans and home loan EMIs.
The rates were kept unchanged despite high inflation in November as the RBI banked on plunging vegetable prices to pull down the overall inflation rate in December.
The central bank also made it clear that any action on interest rate movements will clearly be determined by December price data that will be released by the middle of January.
If food prices do not fall significantly as expected, the RBI would not hesitate to hike interest rates, governor Raghuram Rajan said.
"If the expected softening of food inflation does not materialise and translate into a significant reduction in headline inflation in the next round of data releases, or if inflation excluding food and fuel does not fall, the Reserve Bank will act," Rajan said.
India's wholesale inflation rate during November stood at a 14-month high of 7.52%, while retail inflation was at a nine-month at 11.24%, both driven primarily by very high overall food and vegetable prices.
Inflation, at least vegetable inflation, is showing signs of bottoming out.
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