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RBI maintains status quo; keeps repo rate unchanged at 7.5%, CRR at 4%

By Religare
|

In line with expectations, the Reserve Bank of India kept key rates unchanged and maintained status quo in its first bi-monthly monetary policy review for 2015-16.

The apex bank kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 7.5 per cent and the cash reserve ratio (CRR) at 4.0 per cent. Consequently, the reverse repo rate under the LAF will remain unchanged at 6.5 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 8.5 per cent.

 

The RBI said in notification that it will continue to provide liquidity under overnight repos at 0.25 per cent of bank-wise NDTL at the LAF repo rate and liquidity under 7-day and 14-day term repos of up to 0.75 per cent of NDTL of the banking system through auctions.

"Transmission of policy rates to lending rates has not taken place so far despite weak credit off take and the front loading of two rate cuts. With little transmission, and the possibility that incoming data will provide more clarity on the balance of risks on inflation, the Reserve Bank will maintain status quo in its monetary policy stance in this review," RBI Governor Raghuram Rajan said in a statement.

He further said that the accommodative stance of monetary policy will be maintained, but monetary policy actions will be conditioned by incoming data, such as inflation and US monetary policy.

Story first published: Tuesday, April 7, 2015, 12:40 [IST]
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