December 16, 2010 9:02 PM

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RBI keeps all key rates unchanged

In its mid-quarter review of monetary policy, on Thursday, the Reserve Bank of India has kept its key policy interest rates unchanged. The apex bank kept its short-term lending rate steady at 6.25 per cent, and its borrowing rate unchanged at 5.25 per cent. The RBI also maintained the Cash Reverse Ratio at 6 per cent. However, it decided to reduce the Statutory Liquidity Ratio, the portion of deposits that banks park in government securities, by one percentage point, to 24 per cent, from this Saturday. It also decided to buy government securities from banks to the tune of 48,000 crore rupees in the next one month to inject more funds into the system.The RBI policy position is in line with the Prime Minister's Economic Advisory Council's observation that the system was feeling the pinch of liquidity shortage. It also coincides with inflation coming down to below 8 per cent from double digits till recently.

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