RBI Credit Policy: Key takeaways

In line with market expectations, the Reserve Bank of India on Tuesday kept key rates unchanged. While the repo rate was maintained at 8% and reverse repo rate at 7%, the SLR was cut by 50 basis points.

Rajan kept the policy rate unchanged at 8 per cent at the previous review on April 1 as inflation, especially of food items, hovered at over 8 per cent. Food inflation in April stood at 9.66 per cent and retail inflation at 8.59 per cent.

Here are key takeaways from the RBI's credit policy



Reduces mandatory government bond holdings 25 basis points

Cuts export credit refinance to 32% of eligible export credit from 50%

Special term repo of 25 basis points to offset export credit cut

Price pressures to remain in May, but seasonal

If economy stays on course, no need for interest rate hike

To allow domestic funds in currency derivatives

Lifts individual USD remittance abroad to $125,000 vs $75,000

Allows all residents and non-residents except citizens of Pakistan and Bangladesh to take out Indian currency notes up to Rs. 25,000 while leaving the country.