RBI Credit Policy: RBI keeps key rates unchanged, says inflation risks have gone up

The Reserve Bank of India governor kept the benchmark repo rate unchanged at 6.5 percent, largely on the back of strong economic tailwinds. Other key policy rates like Cash Reserve Ratio and Statutory Liquidity Reserve too have been kept unchanged.

However, the central bank warned that inflation risks were on the upside even as it retained the inflation targets set out in the April policy. On the positive side, the RBI said its policy stance continues to remain ‘accomodative.’

The GDP growth target for the current fiscal has been retained at 7.6 percent by the RBI.

Since the rate-cutting cycle began in January 2015, the key policy repo rate has been cut by 150 basis points to 6.50 percent. However, on the lending side, only about 75 percent basis point cut has been passed on to customers by the banks.

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Posted in: Indian Market Tips