RBI keeps repo-rate unchanged

The Reserve Bank of India has kept its repo rate unchanged at 7.75 percent in its mid-quarter review of monetary policy.

The RBI has also not changed any of its key policy rates and kept reverse repo rate at 6.75 percent, the cash reserve ratio (CRR) at 4 percent and the marginal standing facility (MSF) at 8.75 percent.

The disclosure of the RBI rates surprises market hugely.

In its mid-quarter review the RBI Governor Raghuram Rajan said the apex bank will wait for more data before taking policy action.

“If expected softening of food inflation does not materalise, RBI will act, including on off-policy dates. We are trying to calibrate monetary policy to primarily target inflation in an environment of weak economy. Our sense is economic growth is below potential even now. Growth in second half of current fiscal is expected to be stronger on expansion in agriculture and exports and stalled projects coming on stream. The RBI will not react to any spike in inflation that is temporary in nature,” Rajan said.

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