RBI keeps interest rates unchanged

RBI keeps interest rates unchanged

By: || Updated: 15 Mar 2012 12:50 AM


Mumbai:
In line with expectations, the Reserve Bank of India (RBI) on Thursday
decided to keep key interest rates unchanged in its mid-quarter monetary
policy decision.




"On the basis of the current macroeconomic assessment, it has been decided
to keep the policy repo rate under the liquidity adjustment facility
unchanged at 8.5 per cent," the RBI said while announcing the decision
through a statement.




The repo rate or the repurchase rate is the interest the central bank
levies on short-term borrowing by commercial banks.




Consequently, the reverse repurchase rate, or interest on short-term
lending, also stays at 7.5 per cent. The cash reserve ratio also has been
left unchanged at 4.75 per cent.




In the review on Thursday, the RBI also said rate cuts in the future would
depend on how soon inflation came down to acceptable levels.




"Notwithstanding the deceleration in growth, inflation risks remain, which
will influence both the timing and magnitude of future rate actions," the
central bank said.



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