ISAS Briefs

The Reserve Bank of India (RBI) announced its Annual Policy Statement for FY2008-09 on 29 April 2008. Given the high headline inflation in India, many had felt that the RBI would tighten monetary policy by increasing interest rates. It was, therefore, surprising to note that all the key policy rates (that is, bank rate, repo rate and reverse repo rate) were kept unchanged. Only the cash reserve ratio (CRR) has been increased for arresting growth in liquidity.