RBI keeps Repo Rate unchanged at 5.60%

#Nivezareview on RBI policy ::

The much awaited monetary policy was a non-event today as the governor Raghuram Rajan left repo rate, at which banks borrow money from the Reserve Bank of India, unchanged at 6.5 percent and cash reserve ratio at 4 percent. Mr.Rajan, who announced his last monetary policy today, sees upside risks to the inflation target of 5 percent for March 2017. Much will depend on the benign effects of the monsoon on food prices. The stance of monetary policy remains accommodative and will continue to emphasise the adequate provision of liquidity. Analysts say rising food prices and implementation of 7th Pay commission restricted further rate cut in near term.

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Repo rate is the rate at which RBI lends money to different banks. It is also a tool used to control inflation.