India's central bank on Thursday said the space for monetary easing in 2013-14 remains "very limited" due to high inflation.
A day before rate decision, the Reserve Bank of India said, "In view of macro-financial risks that stay significant, headline inflation remaining above the threshold and consumer price inflation remaining high, the space for action for 2013-14 remains very limited."
In the Macroeconomic and Monetary Developments in 2012-13, the central bank said slow-paced recovery is likely later in 2013-14, contingent on improved governance and efforts to resolve structural bottlenecks.
"If some of the risks come to fore, policy re-calibration may become necessary in either direction," it said.
The RBI is expected to cut interest rates on Friday to revive the economy after growth hit a decade-low in the fiscal year 2012-13. The repo rate is expected to be lowered to 7.25 percent from 7.50 percent and the reverse repo rate to 6.25 percent from 6.50 percent.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.