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India’s Central Bank revises repo rates

by ChemOrbis Editorial Team -
  • 10/04/2017 (13:45)
According to Reuters, India’s Central Bank kept repo rates unchanged at 6.25% while it raised the reverse repo rate by 25 basis points to %6 from 5.75%.

The bank’s decision to keep the repo rate steady represents its effort to deal with liquidity issues and its worries about a possible spike in inflation as the country’s inflation increased to 3.65% in February when compared to the same month of last year, when the inflation was at its lowest of more than five years.

Keeping the gap between repo rate and reverse repo rates, which represents what banks get for deposits at the Reserve Bank of India, helps reduce the volatility in short-term money markets. It also enables banks to increase their deposits at the RBI.
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