The Reserve Bank of India decided to leave its key interest rates unchanged saying that another rate cut could exacerbate inflationary pressures.
The central bank on Monday kept the repo rate at 8.00 percent. The repo rate is the rate at which the central bank lends to banks.
The reverse repo, the rate at which the central bank borrows from banks, was retained at 7.00 percent. Meanwhile, the cash reserve ratio, or CRR, was left unchanged at 4.75 percent.
Majority of economists had expected the central bank to leave policy unchanged, while some were looking for a reduction in the repo rate or the CRR.
The RBI said further reduction in the policy interest rate at this juncture, rather than supporting growth, could exacerbate inflationary pressures. "Future actions will depend on a continuing assessment of external and domestic developments that contribute to lowering inflation risks," it said.
According to RBI, the persistence of overall inflation both at the wholesale and retail levels, amid slow economic growth, points to serious supply bottlenecks and sticky inflation expectations.
The central bank raised the limit of export credit refinance to 50 percent of outstanding export credit of banks from 15 percent, which will potentially release additionally liquidity.
For comments and feedback contact: editorial@rttnews.com
Economic News
What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.