April 6, 2017 / 10:05 AM / 4 months ago

RBI to focus on managing liquidity in new fiscal year

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FILE PHOTO - People queue outside the Reserve Bank of India (RBI) to exchange their old high denomination bank notes in New Delhi, India, December 30, 2016.Adnan Abidi/File Photo

MUMBAI (Reuters) - The Reserve Bank of India (RBI) will focus on draining excess liquidity from the system in the new fiscal year, Governor Urjit Patel said after the monetary policy meeting on Thursday.

The RBI kept its repo rate unchanged at 6.25 percent for a third consecutive policy meeting on Thursday as it continues to guard against a potential flare-up in inflation and an uncertain global economic environment.

"The objective is to more finely align the money market rates with the policy rate, bring down volatility and create conditions for improved transmission of monetary policy across the whole spectrum of interest rates," Patel said.

Reporting by Suvashree Dey Choudhury; Writing by Abhirup Roy

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