Reserve Bank of India today said that reduction in policy rate is not warranted at this point of time. Addressing a press conference post the announcement of 5th Bi-monthly Monetary Policy Statement, RBI Governor Urjit Patel said all the members of Monetary Policy Commission unanimously decided to hold rates. <br/><br/>Mr. Patel said that RBI is focussed to achieve an inflation target of 5 percent in Q4 within a range of (+/-) 2 percent in the medium term. He said that RBI's decision to cut rates by 25 basis points during the October review was vindicated by the inflation outcome in September and October. <br/><br/>Stating that even though some of the upside risks to inflation like the salary rise under the 7th pay commission have waned since the last review; Mr. Patel added that rise in crude price and some food items continue to remain a challenge. <br/><br/>Hence, the MPC Committee felt it was imperative to hold rates in order to meet the target inflation figures.<br/> <br/>When asked if the RBI intends to cut rate in between policy cycles, the RBI Governor said that will totally depend on the incoming data on inflation, particularly food inflation and other global and domestic circumstances. He added that RBI's stance remains accommodative and it will cut rates whenever it is possible.<br/><br/>Chief Economic Advisor Arvind Subramanian has termed the RBI decision to keep monetary policy rate unchanged as bold and brilliant. <br/><br/>Talking to reporters in New Delhi today, Mr Subramanian said, there is uncertainty, both in domestic and International market and the RBI's decision will stablise the market. <br/><br/>He said, Internationally interest rates have gone up considerably after the US election and in India interest rate is coming down because of liquidity going into the Banking system.

Reserve Bank of India today said that reduction in policy rate is not warranted at this point of time. Addressing a press conference post the announcement of 5th Bi-monthly Monetary Policy Statement, RBI Governor Urjit Patel said all the members of Monetary Policy Commission unanimously decided to hold rates. <br/><br/>Mr. Patel said that RBI is focussed to achieve an inflation target of 5 percent in Q4 within a range of (+/-) 2 percent in the medium term. He said that RBI's decision to cut rates by 25 basis points during the October review was vindicated by the inflation outcome in September and October. <br/><br/>Stating that even though some of the upside risks to inflation like the salary rise under the 7th pay commission have waned since the last review; Mr. Patel added that rise in crude price and some food items continue to remain a challenge. <br/><br/>Hence, the MPC Committee felt it was imperative to hold rates in order to meet the target inflation figures.<br/> <br/>When asked if the RBI intends to cut rate in between policy cycles, the RBI Governor said that will totally depend on the incoming data on inflation, particularly food inflation and other global and domestic circumstances. He added that RBI's stance remains accommodative and it will cut rates whenever it is possible.