Mumbai: The Reserve Bank of India on Thursday kept benchmark repo rate unchanged at 6.25 per cent. The decision is in line with predictions by most of the economists who expected a status quo from the central bank.
Besides, maintaining status quo in policy rate, the bankers' bank has projected a GDP growth at 7.4 per cent for the current fiscal, up from 6.7 per cent in 2016-17. All six members of MPC voted in favour of the decision of no change in repo rate.
The bank has increased reverse repo rate by 25 bps to 6 per cent. "Reverse repo rate under the LAF is at 6.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate are at 6.50 per cent," RBI said.
"The decision of the MPC is consistent with a neutral stance of monetary
policy 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," RBI said.
This was first bi-monthly policy review meeting of the fiscal year 2017-18 and fourth stance decided by the six-member Monetary Policy Committee. Recently, the central bank inducted Viral Acharya as deputy governor incharge of monetary policy framework.
RBI governor Urjit Patel later in a press statement said that government was considering the proposal to set up an Standing Deposit Facility or SDF which according to Patel "would provide greater flexibility in managing excess liquidity".
