The pause by RBI did not signal a downward trend....

In a highly fluctuating interest rate scenario in the market.RBI's pause of December 2013 did not signal a downward trend, was actually known when the short term rates were tweaked up marginally

RBI’s original mandate has been to ensure price stability while keeping an eye on growth. The Patel committee set a 4% target for CPI by 2016, within a plus or minus 2% band.

The Urjit Panel committee has suggested that price stability should be the predominant monetary policy objective, and that CPI inflation rather than WPI should be the rationale for rate action. The RBI should aim to bring down CPI inflation to within 8 per cent by 2014-15 and 6 per cent over the next 24 months. Perceptive analysts have pointed out that it is the first time that the RBI has projected an inflation path over a long period of two years.However, it is well realised that for inflation to come down, monetary policy need to be supported by fiscal consolidation. The role of the new government after the elections will be critical.

On the basis of an assessment of the current and evolving macroeconomic situation, RBI decided to:

• increase the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 7.75 per cent to 8.0 per cent; and
• keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liability (NDTL).

Consequently, the reverse repo rate under the LAF stands adjusted at 7.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 9.0 per cent.

Volatility gets passed on through the interest rates globally and India is not alone


Therefore,it is Important that people invest systematically .

Happy investing