Amid expectation of another rate cut to boost the slumping economy, the Reserve Bank of India has decided to keep the repo rate unchanged at 5.15 percent. The reverse repo rate is at 4.90 percent and bank rate at 5.40 percent.
In 2019, the RBI has cut repo rate by 135 basis points so far to a nine-year low Another 25 basis point cut was being expected by analysts.
However, the real GDP growth for 2019-20 is revised downwards from 6.1 percent in the October policy to 5 percent.
"The MPC decided to continue with the accommodative stance as long as it is necessary to revive growth, while ensuring that inflation remains within the target," the Fifth Bi-monthly Monetary Policy Statement, 2019-20 said.
"These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth," it added.
Key highlights
- Monetary Policy Committee (MPC), headed by RBI Governor Shantikanta Das, voted against a rate cut.
- FY20 real GDP growth projection lowered to 5 percent from 6.1 percent.
- MPC has maintained the accommodative stance.
- October-March 2020 CPI inflation seen at 4.7-5.1 percent.
- April-Sept 2020 CPI inflation seen 3.8-4 percent.
- MPC observed that output gap remains negative.
