RBI keeps interest rates unchanged; no EMI relief to borrowers
Mumbai: The Reserve Bank of India today kept its short-term lending and borrowing rates unchanged, in line with expectations, balancing its policy action between a comforting, 7.4 per cent economic growth for the second quarter
Mumbai: The Reserve Bank of India today kept its short-term lending and borrowing rates unchanged, in line with expectations, balancing its policy action between a comforting, 7.4 per cent economic growth for the second quarter of this fiscal and a creeping inflation.
In its fifth bi-monthly monetary policy review of the current fiscal conducted by Reserve Bank of India Governor Raghuram Rajan here, the repurchase rate at which short-term credit is extended to commercial banks was left unchanged at 6.75 per cent.
Accordingly, the reverse repurchase rate, or the interest paid by the central bank for short-term borrowings, also stood frozen at 5.75. per cent. The statutory liquidity ratio and cash reserve ratio that banks have to keep in liquid assets and government securities also remained intact.
The central bank also kept its overall growth projection for 2015-16 at 7.4 per cent and said the inflation target of 6 per cent in January next year as set out in the previous policy update also was within reach, albeit with a slight downside risk.
Following are the highlights of RBI's fifth bi-monthly monetary policy statement for 2015-16:
* Benchmark policy rate unchanged at 6.75 per cent
* CRR unchanged at 4 pc
* GDP to grow at 7.4 pc in 2015-16; mild downside bias
* Economy in early stages of recovery, weakness persist
* Farm sector subdued; rabi, kharif prospect hit by monsoon
* Retail inflation at 6 pc by January, 5 pc by March 2017
* Inflation uptick for 2 months warrants vigilance
* Open to accommodative monetary policy, keeping inflation under control
* Implementation of Pay Panel recommendations to be factored in for future policy deliberation
* Banks transmitted only 0.60 pc of 1.25 pc repo rate cut benefits to borrowers
* To shortly finalise base rate computation based on marginal cost of funds
* Clean up of bank balance sheets will create room for fresh lending
* Linking of small savings rate with market interest rates on anvil, to help in monetary transmission
* Early signs of recovery in pharma, electronic exports
* Sixth Bi-monthly Monetary Policy on February 2