New Delhi: Stubbornly high inflation weighed on the Reserve Bank of India’s decision to hold the key interest rates in its monetary policy review, said Union finance minister Pranab Mukherjee on Monday.
In the mid-quarterly policy review, the RBI kept policy rates unchanged in view of rising inflation and global economic uncertainty, pulling down stocks markets sharply.
High inflation numbers “might have weighed their (RBI’s) decision making process,” Pranab told reporters here.
The central bank also kept cash reserve ratio (CRR), or the percentage of deposits that banks have to keep with RBI, unchanged at 4.75%.
Pranab said it was not necessary for the RBI governor to consult him before the mid-quarterly review of the credit policy.
The wholesale price index-based inflation climbed to 7.55% in May from 7.23% in April. Besides, retail inflation (consumer price index) also moved up to 10.36% in May from 10.32% in the previous month.
The RBI said its future action would depend upon external factors, domestic developments and inflationary risks.
“Future actions will depend on a continuing assessment of external and domestic developments that contribute to lowering inflation risks,” the bank said.