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RBI sticks to stand on repo rate

Mumbai, June 6: The Reserve Bank of India (RBI) has ruled out an immediate cut in the repo rate and hopes to keep it unchanged for quite sometime. The repo rate is currently pegged at 5 per cent. “We do not expect to make a repo rate cut now or for quite sometime, until the monsoon and inflation situation becomes clearer,” the RBI said in a statement today.

There has been renewed speculation on this issue after the European Central Bank (ECB) brought down interest rates by 50 basis points to 2 per cent on Thursday. The ECB move generated hopes that the RBI would continue the momentum of a soft interest rate regime by bringing down the repo rate.

“The rate of inflation in the main Euro countries is in the range of 2 per cent compared with our inflation rate which was 5.9 per cent on May 17, 2003,” the RBI added.

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