85 breached
The Indian rupee has breached the significant psychological barrier of 85 against the US dollar, marking an all-time low amid a confluence of domestic and global pressures.
In its penultimate monetary policy review of the fiscal, the Reserve Bank of India (RBI) on Wednesday maintained status quo on its key lending rates citing concerns over the rising trajectory of inflation.
The central bank said its repurchase rate, or the short-term lending rate for commercial banks, has been maintained at 6 per cent.
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Consequently, the reverse repo rate remained at 5.75 per cent.
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The RBI said that “two of the key factors determining the cost of living conditions and inflation expectations – food and fuel inflation – edged up in November.”
“Accordingly, the MPC (Monetary Policy Committee) decided to keep the policy repo rate on hold,” the fourth bi-monthly monetary policy statement said.
“The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent… while supporting growth,” it added.
The decision was taken by the six-member MPC headed by RBI Governor Urjit R. Patel. Five members of the panel voted in favour of maintaining the key lending rate.
At its previous policy reviews, the central bank had kept its repo rate unchanged at 6 per cent.
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