The Reserve Bank of India has kept the key policy rate unchanged in the monetary policy. The repo rate now continues to stand at 8% while reverse repo was at 7%. Cash reserve ratio (CRR) remains at 4.25%.
CRR represents the amount of deposits that the banks keep with RBI. Repo rate is the rate at which the commercial banks will borrow the funds from the RBI against the securities, to meet the shortage of funds.
Analysts feel that the RBI should focus its strategies more towards reducing the core inflation.
Markets have seen some dips in the wake of the RBI’s inaction. The Nifty has fallen to 5851, down by 6 points.