RBI hints at easing of policy rates

The Reserve Bank of India (RBI) today hinted at a reduction in its key policy rates, despite high inflation, saying it would take steps to support growth in a way that would not feed inflation.

''Growth-inflation balance warrants careful policy calibration as growth slows but inflation risks persist,'' RBI said in its quarterly economic review ahead of its quarterly policy review.

''As macro-risks from inflation and twin deficits recede further, that could yield space down the line for monetary policy to respond more effectively to growth concerns,'' it added.

RBI also said speedy implementation of recent policy measures announced by the government and sustained reforms are important for turning the economy around.

Based on a survey of professional forecasters, RBI has lowered the GDP growth projection for the current financial year to 5.7 per cent from the earlier estimate of 6.5 per cent.

The wholesale price-based inflation, however, has been estimated to be around 7.7 per cent, up from 7.3 per cent projected earlier.