The RBI tried to keep the markets happy and that reflected as the markets ended firm.Banking was the most impressive sector today as the RBI left all key rates unchanged and maintained a status quo on its monetary policy stance. The only negative was a lowered growth forecast to 8.5% from 8.5-9%. The reason for this decline is an expected decline in Global GDP in 2007.
Inflation stayed th key focus for the RBI. Inflation fighting seems to have been the predominant stance this time as inflation targets were revised downward to 5% from last year’s targets of 5-5.5%. RBI’s medium term inflationary target is now 4-4.5%. Reacting to the announcement, Finance Minister P Chidambaram said that it is RBI policy to curb inflation without hurting growth and the Government has no view on rupee exchange rate.

via: Moneycontrol.com