Interest rates remain unchanged in RBI policy announcement
New Delhi: The Reserve Bank of India announced no change in the interest rates but withdrew its 100 per cent incremental Cash Reserve Ratio decision on Wednesday, providing a big relief to banks in the public and private sectors which were facing cash-crunch.
Announcing the decision, bank governor Urjit Patel told media persons that the repo rate has not been changed for two reasons: first the rate was brought down by zero point two five per cent in October ( to 6.25 per cent) and, two, prices have shown a rising trend since November end. Reverse repo rate has also remained the same.
The announcement was made after a six-member monetary policy committee's meeting which was headed by him. Patel voted for no-change decision. It was the second meeting of the committee after formation to decide the rates. The first meeting was held in October last.
The decision has saddened those who were expecting rate cuts due to demonetisation and fall in money supply, Share market too reacted adversely.
The banks, however, have reacted positively as their demand to bring down the incremental CRR percentage on deposits has been met. They were facing cash crisis due to increase in the CRR rate to 100 per cent of deposits.