RBI maintains status quo; key policy repo rate at 6.5%

NewsBharati    05-Oct-2018
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New Delhi, October 5: The Reserve Bank of India (RBI) today maintained status quo and maintained the key policy repo rate at 6.50 percent. Repo rate is the rate at which banks borrow short-term funding requirement from the central bank.


 

The six-member monetary policy committee headed by Governor Urjit Patel opted to take a pause after hiking the rates in its last two successive policy meetings.

The Bank also retained GDP growth estimate at 7.4 per cent for the current financial year and projected it to go up to 7.6 per cent in the next financial year.

A steep rise in crude prices and hike in minimum support price (MSP) for agri-commodities had stoke inflation concerns, even as the numbers for first half of FY19 were lower than RBI estimates. But there also were concerns tight liquidity in the system.

On Friday, the RBI committee shifted to 'calibrated tightening stance'.

A total of 4 of six MPC member voted in favour of status quo . MPC member Chetan Ghate had voted for increase in repo rate by 25 basis points, while Dholakia voted for maintaining 'neutral' stance.

RBI has retained the GDP growth estimate at 7.4 per cent for FY19. It expects the economic growth to accelerate to 7.6 per cent in FY20.