RBI Holds Interest Rates Steady, Inflation Remains Broadly Balanced

The Reserve Bank of India today kept the repo rate or rates at which the RBI lends money to banks steady. Accordingly, the repo rate now continues to remain at 4%.

Inflation remains a concern for the country's central bank, given that it is still over the targetted 4% levels, which is one reason the RBI has held interest rates steady for the last few Monetary Policies.

The Union Budget, which was expansionary and saw fiscal deficit targets higher than expected may also have left policy makers worried over inflation.

The Monetary Policy Committee, which is mandated to decide on policy rates, has now kept the key benchmark rate unchanged in its last four reviews.

Consumer Price Index inflation eased to 4.59% in December 2020 as compared to 6.93% in November, though it is still above the RBI targets.