Zee Media Bureau


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The Reserve Bank of India (RBI) on Tuesday kept interest rates unchanged at its bi-monthly monetary policy review amid lingering concerns over inflation, after having already cut the repo rate by a sharper 50 basis points at its last meet.


The repo rate, at which the Reserve Bank of India lends to banks, has been retained at 6.75 percent. The cash reserve ratio (CRR) for banks has been kept unchanged at 4 percent.


Also Read: RBI credit policy review: Know why the central bank kept rates on hold


Inflation based on the consumer price index rose to 5 percent in October, from 4.41 percent in September, mainly on the back of rising food prices.


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Analysts are of the view that the Reserve Bank of India is likely to wait for the Budget announcement before proceeding further. The two key events the central bank is watching are the upcoming Fed event and the impact of the 7th Pay Commission recommendations.


Also Read: RBI monetary policy review: Expert views


There is a possibility that interest rates in the US might eventually go up for the first time since the global economic crisis of 2008. Federal Reserve rate-setters are meeting on December 15-16 to take a call on this.


Also Read: Know the key highlights of RBI monetary policy review


The central bank is also mindful of the inflationary impact of a falling rupee, which has already hit a two-year low against the dollar recently.


With Agency Inputs