The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) kept its repo rate under the liquidity adjustment facility (LAF) unchanged at 5.15 per cent while maintaining an “accommodative stance”. This is the second consecutive bi-monthly monetary meeting in this fiscal year 2019-20 in which the repo rate has been kept unchanged.
Apart from the repo rate, the reverse repo rate too was kept unchanged at 4.90 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 5.40 per cent, the central bank said in a statement.
This apart, the central bank forecasts the GDP growth for 2020-21 at 6.0 per cent. In April-September 2020, the GDP growth is forecast in the range of 5.5-6.0 per cent while in the October-December quarter, the GDP forecast is 6.2 per cent.
For the current fiscal 2019-20, the central bank retained the GDP growth at 5 per cent.
“The outlook for inflation is highly uncertain at this juncture. On the other hand, economic activity remains subdued and the few indicators that have moved up recently are yet to gain traction in a more broad-based manner. Given the evolving growth-inflation dynamics, the MPC felt it appropriate to maintain status quo,” the RBI said in its press release.
Between February and October 2019, the central bank had reduced the repo rate by 135 basis points.
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