RBI holds main rate as food prices drive inflation surge
Indian central bank imposes cash ratio on banks as Das says food-driven shock may be temporary
The Reserve Bank of India kept its policy rate unchanged today (August 10), despite inflation rising close to the upper end of the target band.
Members of the monetary policy committee voted unanimously to keep the main rate at 6.5%, while imposing a cash reserve ratio on banks. The MPC said it would “remain focused on withdrawal of accommodation to ensure that inflation progressively aligns with the target”.
The RBI targets 4% inflation within a tolerance band of plus or minus two percentage
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