The Reserve Bank of India’s Monetary Policy Committee held the policy repo rate steady at 5.25% on June 5, with a neutral stance.
The rate decision and what came with it
The standing deposit facility rate stays at 5%, while the marginal standing facility rate and bank rate remain at 5.5%.
The RBI introduced tax exemptions on interest income and capital gains for eligible foreign investors holding Indian government bonds. The central bank also enhanced dollar deposit schemes for non-resident Indians. Analysts estimate these measures could attract between $30 billion and $40 billion in external commercial borrowings and foreign debt inflows.
The rupee hit a record low of 96.86 against the US dollar on May 20.
