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RBI Holds Interest Rates Steady; Policy Stance Remains


The Reserve Bank of India, today held repo rates or interest rates steady, as was largely expected. Benign inflation readings of the last couple of months, along with a drop in crude prices and a sharp bounce in the Indian rupee, may have been factors the Monetary Policy Committee (MPC) considered in maintaining a "status quo" policy.

The policy stance has also remain unchanged with the central bank maintaining the "calibrated tightening" stance.


"The decision of the MPC is consistent with the stance of calibrated tightening of monetary policy in consonance with the objective of achieving the medium-term target for consumerprice index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supportinggrowth," the RBI said in its release.

RBI Holds Interest Rates Steady; Policy Stance Remains

Retail inflation, measured by y-o-y change in CPI, declined from 3.7 per cent in September

to 3.3 per cent in October, a fact that the MPC may have considered.

With today's status quo policy, interest rates on loans and deposits are unlikely to trend higher.

Meanwhile, the stock markets barely moved following the RBI's Monetary Policy, as it was largely on expected lines. The Nifty which was down almost 80 points, continued to maintain the same levels.

Read more about: rbi repo rates crr
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