New Delhi: The Reserve Bank of India (RBI) kept its repo or key interest rate unchanged at 6.25 per cent on Wednesday, as widely expected, while lowering projections for inflation and striking a less hawkish tone in a policy statement.
The reverse repo rate was also left unchanged at 6 per cent. At the same time, the RBI cut banks’ statutory liquidity ratio or SLR by 50 basis points to 20 per cent of total deposits starting on June 24.
Statutory liquidity ratio (SLR) is a mandated requirement for commercial banks under which the lenders are required to maintain in the form of government approved securities before extending credit to customers.
Significantly, however, the RBI cut its projection for consumer inflation to 2-3.5 per cent in April to September, down from 4.5 per cent earlier, and to 3.5-4.5 per cent in October to March, down from 5 per cent.