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RBI keeps rates unchanged in its mid-quarterly monetary policy review


December 16, 2011 - New Delhi

The Reserve Bank of India (RBI) in its mid-quarterly monetary policy review has kept the repo rate and reverse repo rate constant keeping in view the current financial condition of the country.

The repo rate remains unchanged at 8.5 percent and reverse repo rate at 7.5 percent.

The RBI also left the cash reserve ratio, which is the amount of cash the banks have to maintain with the central bank, unchanged at 6 per cent, despite market speculation that it might cut the ratio in order to bolster market liquidity. Bank rate was also maintained at 6%. eserve Bank of India governor, D. Subbarao had earlier said that rupee depreciation has added to the pressure of inflation.

The RBI regulates the important bank rates to maintain a sound financial health of the country. Repo rate is the rate at which RBI lends cash to the banks whereas reverse repo rate is the rate at which banks lend money to RBI.

ANI

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