The Reserve Bank of India (RBI) kept key interest rates unchanged in its mid-quarter review of the monetary policy today. The repo rate and the reverse repo rate have been left the same at 8% and 7% respectively. The cash reserve ratio has been maintained at 4.25% of the demand and time deposits. The RBI has said while the money supply growth remained below expectations due to lower deposit growth, growth in the non-food credit was above the expected 16% rate indicating a pick-up in the economic activity. As per RBI, the decline in the core inflation reinforces the likelihood of steady moderation in inflation in FY14.
Food stocks are trading mixed with Sterling Biotech the biggest gainer and VST Industries being the biggest loser. According to a leading financial daily, ITC took its first step in its foray in the food processing industry. The company began construction of a milk processing plant in Munger district, Bihar at an estimated cost of Rs 1.5 bn. The plant is expected to be completed in one year and will have a processing capacity of 0.2 million litres per day that will be utilized to produce 10 tonnes of ghee, 20 tonnes of milk powder and 20 tonnes milk in pouches for domestic consumption per day. ITC stock is trading up by 0.5%.