Raghuram Rajan keeps repo rate unchanged at 6.5%, CRR at 4%

“As expected, the RBI has kept repo rates unchanged at 6.5% and also kept CRR at existing 4%. The monetary easing cycle is most probably at near the end. Before further cut RBI probably want to see the outcome of upcoming Fed meet and the Brexit referendum. Going forward the factor like how monsoon progresses and the effect on CPI inflation of 7th pay commission implementation will be key before we can expect a 25 bps cut in August. However, even that's happen we expect a long pause thereafter. RBI since 2015 reduce rate almost 150 bps but showed its concern that banks failed to pass the benefit. The real interest rate of 1.9 per cent which is already down from an average of 2.26 per cent and in the preferred range of RBI, which is 1.5-2 per cent keep chances of aggressive rate cut minimal.”​

Mr. Rohit Gadia, Founder & CEO, CapitalVia Global Research Limited post monthly monetary policy announcement