RBI Maintains Status Quo

The Reserve Bank of India in its second bi-monthly Monetary Policy on Wednesday kept its repo rate unchanged at 6.25% and reverse repo rate unchanged at 6% respectively, ANI reported. The monetary policy committee, which is headed by RBI Governor Urjit Patel, left the rates unchanged amid most analysts expectation of maintaining a status quo on the policy rate, which stands at 6.25%. The committee however, cut Statutory Liquidity Ratio by 50 basis points to 20% starting June 24. “The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index inflation of 4% within a band of +/- 2%, while supporting growth,” stated the RBI in a statement. To address the bad loan stress on the banks’ financials, the central bank said it will continue to work in partnership with the government to address the stress in banks’ balance sheets.