IN LINE with market expectations, the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) left its key interest rate unchanged for the fourth time in a row on Friday, even as it flagged retail inflation as a “major risk to macroeconomic stability and sustainable growth”.
The RBI’s decision to keep the repo rate — the rate at which the RBI lends money to banks to meet their short-term funding needs — unchanged at 6.5 per cent will mean that all external benchmark lending rates (EBLR) linked to the repo rate will not rise. It will provide relief to borrowers as their equated monthly instalments (EMIs) will not increase.
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