RBI to announce monetary policy 2013-14 today; rate cut expected

May 03, 2013 09:21

Striking a hawkish tone, RBI has said the scope for reducing interest rate is limited in view of high retail inflation and current account deficit even as India Inc clamours for rate cut to boost growth.

The Reserve Bank, which will today announce monetary policy for 2013-14, has also made a case for improved governance and removing structural bottlenecks.

"While demand-side inflation pressures reduced, high consumer price inflation along with the CAD well above sustainable levels limit the space for monetary policy to support growth," RBI said.

The central bank's Macroeconomic and Monetary Developments report said that even while macro-financial stability risks have started getting addressed, they remain significant at current juncture.

"This necessitates careful calibration of monetary policy during 2013-14," RBI said.

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