TIL Desk/Business/New Delhi/ The Reserve Bank of India keeps policy repo rate under liquidity adjustment facility (LAF) unchanged at 6.0 per cent. Consequently, reverse repo rate under the LAF remains at 5.75 per cent and marginal standing facility rate and the bank rate at 6.25 per cent.
Repo rate is the rate at which the RBI lends money to commercial banks in the event of any shortfall of funds. Repo rate is used by monetary authorities to control inflation.
The consensus in the market that the six-member monetary policy committee won’t change the policy repo rate in their two-day meet that concludes on Wednesday has not been unfounded.
Not only rising inflation, but hardening bond yields, and tightening liquidity also reduce the scope for the central bank to go lenient on rates for now. As such, the policy repo rate is expected to stay at 6 per cent.
