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Rajan keeps key interest rates unchanged in his last monetary policy

Rajan keeps key interest rates unchanged in his last monetary policy

thestatesman.com |

Reserve Bank of India Governor Raghuram Rajan kept key interest rates unchanged on Tuesday.

The repo rate under the liquidity adjustment facility (LAF) will remain at 6.5 per cent, cash reserve ratio (CRR) will remain at 4 per cent and reverse repo rate under the LAF will remain at 6.0 per cent.

It was widely expected that Rajan will hold the key interest rate in his last monetary policy review as retail inflation was above the comfort zone.

The consumer price inflation was at 22 month high at 5.77 per cent in June 2016 compared to the 5.40 per cent in June 2015. The previous highest mark was 7.8 per cent in August 2014.

Meanwhile, the Union government had announced last week that it would like the RBI to focus on maintaining retail inflation rate of 4 per cent for the next five years.

Rajan&’s 3-year term will come to an end on September 4.

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