New Delhi, Dec 7: Despite expectations of rate cut, the Reserve Bank of India (RBI) today maintained that all the key rates would remain unchanged in its latest monetary policy review. RBI kept its policy rate unchanged at 6.25 per cent.
After the latest review, under the liquidity adjustment facility, the repo rate will be maintained at 6.25 per cent and whereas the reverse repo rate will be 5.75 per cent. Meanwhile, despite the increase in liquidity, the top bank has decided to maintain the Cash Reserve Ratio (CRR) at 4 per cent and bank rate at 6.75 per cent.
The RBI’s monetary policy review today was the first review meeting after demonetization of old 500 and 1000 rupees notes. The unchanged rates came amid expectations of interest rate cut. Amidst widespread expectations of at least 0.25 percent (25-basis point) cut in the policy rate, the six-member Monetary Policy Committee, MPC met yesterday to discuss about the monetary policy. (ALSO READ: RBI Monetary Policy Review today, likely to cut interest rates)
This is the second meeting of MPC headed by RBI Governor Urjit Patel after the first in October. In October, RBI had cut repo, or the short-term lending rate, by 0.25 percent to 6.25 percent. Since January 2015, RBI has reduced the policy rate by 1.75 percent. It will be for the second time that the monetary policy would be based on the recommendation of the MPC.
RBI has already taken steps, including 100 per cent incremental increase in Cash Reserve Ratio, CRR, to suck out excess liquidity from banks.