The Reserve Bank of India kept key rates unchanged in its policy review meet today, but cut the SLR by 50 bps to 22%.
The repo rate stands unchanged at 8% and CRR at 4%. This is the second consecutive time that the rates have been left unchanged due to stubborn inflation.
RBI also cut the ceiling on debt that must be held-to-maturity by half a percentage point to 24%.
Warning about inflation, RBI in a statement said, "With some continuing uncertainty about the path of the monsoon, it would be premature to conclude that future food inflation, and its spill-over to broader inflation, can be discounted."
RBI also cut the ceiling on debt that must be held-to-maturity by half a percentage point to 24%.
Warning about inflation, RBI in a statement said, "With some continuing uncertainty about the path of the monsoon, it would be premature to conclude that future food inflation, and its spill-over to broader inflation, can be discounted."
The central bank said it would contain retail inflation, as measured by the Consumer Price Index (CPI), below 8% mark in early 2015, in line with the Urjit Patel committee suggestions, and 6% by early 2016.
The broad expectation was that the RBI will keep the repo rate (at which it lends to banks) unchanged at 8%. This is despite a lower print for the Consumer Price Index (CPI)-based inflation for June. The latter rose 7.31% from a year earlier in June, compared with a rise of 8.28% in May. While this was under RBI's January-end projection of 8%, it was still above its comfort level.
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