New Delhi: On Tuesday Reserve Bank of India Governor Raghuram Rajan left interest rates unaffected in his concluding monetary policy review, as his three-year term draws to a shut. On September 4 Rajan will give up his post. The rate at which the RBI lends to commercial banks – remains at 6.5%. The RBI had preserved the same repo rate in his previous monetary policy review in June.
The repo rate helps control price rises, which is one of the major concerns of RBI. Rajan was predictable to leave it unchanged and wait for his descendant to make any changes to it if essential. The reverse repo rate – which commercial banks use to charge the central bank – also remained the similar at 6%, Rajan conveyed at the bi-monthly review. The cash reserve ratio stays at 4%. CRR is the minimum percentage of deposits that banks have to hold in cash or as deposits with the central bank. This is also used to control money supply in the financial system.
In June Rajan had declared that he would not continue as RBI governor subsequent to his term concluded. He had conveyed that he would return to academia. The economist had been roundly criticised by Bharatiya Janata Party leader Subramanian Swamy, who claimed he kept interest rates elevated on purpose, while condemning him of leaking "sensitive financial information". However, Rajan has been praised by others for keeping prise rise inferior and helping India achieve its fiscal targets. The reverse repo rate also remained the same at 6%, while the CRR was maintained at 4%, leaving the next RBI governor with the task of keeping inflation down.