Key policy rates and reserve ratios unchanged at 6.5% as Reserve Bank of India’s bi-monthly monetary policy review has came on Tuesday, concerned over the slight rise in inflation and some domestic and global upside risks that have sprung up since April.
The decision was taken at the second bi-monthly policy review for the current fiscal by Reserve Bank of India (RBI) Governor Raghuram Rajan at its headquarters here. “The inflation surprise in the April reading makes the future trajectory of inflation somewhat more uncertain,” Rajan said.
After announcing RBI governor said on speculations about his second term that you will know when there is news and it would be cruel of me to spoil the fun the press is having. Decision is reached after consultation with between Government and RBI.
In the first bi-monthly policy review on April 5, Rajan had cut by 25 basis points the repurchase rate, or the short-term lending rate for commercial banks on loans taken from the Reserve Bank — to 6.5 per cent from 6.75 per cent.
The reverse repurchase rate for sort-term borrowings was raised to 6 per cent from 5.75 per cent.