The Reserve Bank of India (RBI) on April 6 kept the repo rate unchanged for the third consecutive time at 6.25% in the first monetary policy of the current fiscal year keeping a cautious outlook for inflation.
However, the reverse repo rate has been increased to 6%.
In its last policy review of the previous fiscal in February, Governor Urjit Patel did not change the RBI’s key policy rate along with marginal standing facility rate, reverse repo rate and bank rate.
While this was so, Marginal Standing Facility (MSF) and the bank rate have been fixed at 6.50%. The RBI went to add that the GVA growth is projected to be 7.4% in 2017-18 as compared to 6.7% in 2016-17.
In the meanwhile, the central bank projects consumer inflation to average at 4.5 per cent in the first half of the year and 5 per cent in the second half.
In Patel’s first policy review as the RBI Governor in October last, the repo rate was reduced by 0.25% to 6.25%.
Since then, the repo rate has been retained at 6.25%. However, since January 2015 the RBI has cut repo by 1.75%. In the last policy, the six MPC members voted in favour of holding the rates amid hopes that the RBI will maintain the pace of economic growth.