Reserve Bank keeps key interest rates unchanged
New Delhi, Feb 3 (IANS) The Reserve Bank of India (RBI) Tuesday decided to keep key interest rates unchanged in its sixth bi-monthly policy review. The apex bank kept the repo rate, or the interest that banks pay when they borrow money from the RBI to meet their short-term fund requirements, unchanged at 7.75 percent.
The reverse repo rate, or the interest that the RBI pays to commercial banks when they park their surplus short-term funds with the central bank, has been adjusted to 6.75 percent. On Jan 15, the apex bank had cut the the repo rate by 25 basis point from 8 percent to 7.75 percent.
On Tuesday, the RBI reduced the statutory liquidity ratio (SLR), the mandatory amount of bonds lenders must keep with it by 50 basis points to 21.5 percent of their net demand and time liabilities (NDTL). The Cash Reserve Ratio (CRR) is left unchanged at 4 percent. The central bank's action is on expected lines as most analysts had predicted a status quo, considering the apex bank had last month cut the repo rate.