Reserve Bank of India keeps rates unchanged

In line with expectations, the Reserve Bank of India (RBI) 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 percent," 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 percent. The cash reserve ratio also has been left unchanged at 4.75 percent.
In the review 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.