Today, RBI Governor Raghuram Rajan retains repo rate at 8 % as expected. The central bank has not cut rates since May 2013 despite retail inflation easing to a record low of 5.5 per cent in October.
Economists predicted RBI to hold rates despite pressure from Finance Ministry, who had pushed for a cut in interest rates in a bid to boost demand and drive growth. Indian economy is trying to regain momentum from its slowest phase of economic growth since the 1980s. Stocks markets incurred losses post RBI announcement. Sensex and Nifty fell over 0.50 % post the policy announcement.
