The second bi-monthly monetary policy announcement of the fiscal from the Reserve Bank of India saw a status quo as far as the key policy rate is concerned. The repo rate remains at 6.25%.
Although conditions augured well for a rate cut with inflation remaining benign and growth being weak, the 6-member monetary policy committee that decides on the rate, opted to stick to status quo. Retail inflation had dropped to 2.99 per cent in April from 3.89 per cent in April. And the fourth quarter GDP numbers had dropped to a growth rate of 6.1 per cent as against 7 per cent in the earlier quarter.
It has however slashed the Statutory Liquidity Ratio or the percentage of deposits that banks have to park in government securities, by 0.5 per cent to 20 per cent, a move that would result in increased lending by banks.
via Monetary policy: RBI maintains status quo | Business Line
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