RBI Leaves Key Policy Rates Unchanged, Cautions Against Inflation

With the inflation trajectory uncertain, the RBI keeps the key rates unchanged.

Reserve Bank India (RBI) Governor Raghuram Rajan. (Photo: Reuters)

• The Reserve Bank of India (RBI) on Tuesday left its key policy rates and reserve ratios unchanged, concerned over the slight rise in inflation and some domestic and global upside risks that have sprung up since April.
  
  
• RBI Governor Raghuram Rajan said that the inflation surprise in April makes the future inflation trajectory somewhat uncertain.
  
  
• In the first bi-monthly policy review on 5 April, Rajan had cut by 25 basis points the repurchase rate, for commercial banks on loans taken from the Reserve Bank – to 6.5 per cent from 6.75 per cent. The reverse repurchase rate for sort-term borrowings was raised to 6 per cent from 5.75 per cent.
  

(With inputs from IANS.)

BloombergQuint’s Alex Mathews analyses the RBI policy