India Central Bank Kept Rates Unchanged

The Reserve Bank of India decided to leave its key interest rates unchanged on Tuesday as it awaits greater transmission of the effects of the previous three rate reductions into the economy.

The Reserve Bank of India, governed by Raghuram Rajan, maintained its repo rate at 7.25 percent and the reverse repo rate at 6.25 percent.

The repo rate is the rate at which the central bank lends to commercial banks and the reverse repo rate is the rate at which it accepts deposits from banks.

The repo rate currently is at its lowest level since 2013. The bank reduced its key rates by 25 basis points each in January, March and June.

The cash reserve ratio was kept unchanged at 4.00 percent.

Given that policy action was front-loaded in June, it is prudent to keep the policy rate unchanged at the current juncture while maintaining the accommodative stance of monetary policy, the bank said.

via RTT News

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza