RBI maintains status quo; leaves rates unchanged
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Reserve Bank on Tuesday kept the key interest rates unchanged in its first quarter monetary policy review with focus on stabilising the domestic currency and containing the current account deficit.
Presently, the short-term lending (repo) rate, or the rate at which RBI lends to banks, is at 7.25 percent, while the cash reserve ratio (CRR) is at 4 percent.
The RBI last cut its repo rate by 25 basis points to 7.25 percent in May. It left the rate on hold at its last review, in June, despite growth that slowed to just 5 percent in the last fiscal year.
The RBI took strong action to defend the embattled rupee two weeks ago by tightening money market liquidity and pushing up short-term interest rates to curb fund flows out of India and make speculating against the currency more costly.
Today's monetary policy review is the last for RBI Governor Duvvuri Subbarao, whose term will end in early September after five turbulent years, unless it is extended.
The rupee fell to an all-time low 61.21 to the dollar on July 8, when it was down about 10 percent since the start of the year. (ZEE News)
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