No rate cut from Rajan; monsoon and inflation key for next time

As expected, the Reserve Bank of India (RBI) has decided to maintain status quo by not cutting repo rate on June 7, 2016.

The repo rate now stands at 6.5%, down from 8.75% in January last year.

Bankers Poll done on Zee Business had expected RBI to not change rates.

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RBI said, "On the basis of an assessment of the current and evolving macroeconomic situation, it has been decided to:

• keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.5 per cent;

• keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liabilities (NDTL); and

• continue to provide liquidity as required but progressively lower the average ex ante liquidity deficit in the system from one per cent of NDTL to a position closer to neutrality.