RBI held CRR steady as liquidity tight on slow govt spending

MUMBAI Tue Dec 18, 2012 3:40pm IST

A police officer stands guard in front of the Reserve Bank of India (RBI) head office in Mumbai April 17, 2012. REUTERS/Vivek Prakash/Files

A police officer stands guard in front of the Reserve Bank of India (RBI) head office in Mumbai April 17, 2012.

Credit: Reuters/Vivek Prakash/Files

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MUMBAI (Reuters) - The Reserve Bank of India did not cut banks' cash reserve ratio (CRR) on Tuesday as liquidity tightness was due to slow government spending, Subir Gokarn, a deputy governor, said.

He said the central bank will buy bonds through open market operations going forward, if needed.

Earlier in the day, the RBI left its key interest rates and the CRR unchanged, but said policy focus was shifting towards growth, reiterating its October guidance of further easing in the first quarter of 2013 as inflation was seen cooling.

(Reporting by Swati Bhat; Editing by Sunil Nair)

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