RBI leaves key rate unchanged at 6.25%

At its policy meeting today, the Reserve Bank of India (RBI) leaves the benchmark interest rate – Repo rate unchanged at 6.25%, as widely expected.

The central bank also maintained the reverse repo rate at 6.00%, while slashed the Statutory Liquidity Ratio (SLR) by 50 bps to 20% of total deposits.

Summary:

Ceiling on amount of securities that can be held under "held to maturity" remains unchanged

Policy interventions including access to open trade may be envisaged to arrest slump in prices

Easing of inflation excluding food and fuel may be transient in view of underlying stickiness in situation of rising rural wage growth and consumption demand

Headline inflation for H1 2017/2018 2-3.5% and 3.5-4.5 in H2