The Reserve Bank of India (RBI) on Wednesday decided not to change key interest rates in its second bi-monthly monetary policy review.
RBI Governor Urjit Patel- led Monetary Policy Committee (MPC) kept the repo rate unchanged at 6.25 percent. Consequently, the Reverse Repo Rate stands at 6 percent while the CRR remains at 4 percent.
However, RBI has however slashed the Statutory Liquidity Ratio (SLR) or the percentage of deposits that banks have to park in government securities, by 0.5 percent to 20.5 percent, a move that would result increased lending by banks.
“The current state of the economy underscores the need to revive private investment, restore banking sector health and remove infrastructural bottlenecks. Monetary policy can play a more effective role only when these factors are in place,” RBI said.