In the second Monetary Policy Committee (MPC) meet, the Reserve Bank of India on Wednesday maintained the key rates unchanged.

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The announcement came in as a surprise move. In previous policy, the RBI trimmed down the rates by 25 basis points, which led the policy repo rate to 6.25% from 6.50%, while reverse repo rate was adjusted to 5.75% and that of bank rate at 6.75%.

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"With the enhancement in the ceiling for issue of securities under the Market Stabilisation Scheme (MSS) to Rs 6,000 billion, it has been decided to withdraw the incremental CRR effective the fortnight beginning December 10, 2016", RBI said.

On November 26, the central bank had announced an incremental cash reserve ratio (CRR) of 100 per cent of the increase in net demand and time liabilities (NDTL) of scheduled banks between September 16, 2016 and November 11, 2016 effective the fortnight beginning November 26, 2016. 

Since November 8, when Prime Minister Narendra Modi had announced the plan to ban high denomination notes, the pressure on Governor Urjit Patel grew immensely.

Patel, in his first policy as RBI Governor, in October reduced the repo rate (short-term lending rate) by 0.25% to 6.25%. This was the second policy which will be based on recommendations of the MPC.

A majority of the nearly 60 analysts polled by Reuters had predicted that RBI will cut the repo rate by 25 basis points (bps) to 6%, the lowest since November 2010, while six predicted a deeper 50 bps cut.

RBI has cut repo by 1.75% since January 2015.