RBI Keeps Interest Rate Unchanged On Loans ‘No Relief on EMI ’
The Reserve Bank of India (RBI) on Tuesday kept interest rates unchanged at its second bi-monthly monetary policy review amid lingering concerns over inflation, after having already cut the repo rate by a 25 basis points at its last meet.
The repo rate, at which the Reserve Bank of India lends to banks, has been retained at 6.50 percent. The cash reserve ratio (CRR) for banks has been kept unchanged at 4 percent.
RBI Governor Raghuram Rajan said, though the rates are on hold, the stance of monetary policy remains accommodative. The Governor added that global growth is struggling to get traction; variety of factors will come into play while deciding the bank rates.
“April inflationary trend has made the trajectory uncertainty”, indicating inflation is on upside, said the Governor.
Inflation based on the consumer price index rose to 5.5 percent in April, from 5 percent in March, mainly on the back of rising food prices. “We will have to attain measures to reach 5% inflation target for 2017”, said Rajan
RBI has also kept FY17 GDP target unchanged at 7.6 percent.
Talking about the volatility of rupee and curbing it, Raghuram Rajan said, ‘we have no desire in moving rupee in any direction”. RBI is not averse to selling dollars in case of extreme volatility seen in Rupee, he added.
On the investment scenario in the country, RBI said in its policy statement said that public investment is stronger, but private investment is worrisome,