Mumbai: The Reserve Bank today kept interest rate unchanged as was widely expected in view of upward trend in inflation even as it cut the growth forecast to 6.7 per cent for the current fiscal.
Consequently, the repo rate, at which it lends to banks, will stand at 6 percent.
The reverse repo, at which RBI borrows from banks will continue to be at 5.75 percent, it said at the fourth bi-monthly policy review.
In its last review in August it had slashed the benchmark lending rate by 0.25 percentage points to 6 percent, the lowest in 6 years.
The six-member monetary policy committee voted 5:1 for the decision, with only Ravindra Dholakia voting for a 0.25 percent reduction in rates.
The Reserve Bank of India (RBI) said that after a record low in June, inflation is trending up and estimated the headline number to touch 4.6 percent by the March quarter.
Following are the highlights of the fourth bi-monthly Monetary Policy Statement 2017-18, issued by Reserve Bank of India:
* Key policy rate kept unchanged at 6 percent.
* Reverse repo rate unchanged at 5.75 percent.
* Cuts economic growth forecast to 6.7 percent from 7.3 percent for FY'18
* Projects inflation at 4.2-4.6 percent in the second half.
* GST implementation rendered prospects for the manufacturing sector uncertain in the short term.
* Focus on keeping headline inflation close to 4 percent on a durable basis
* RBI continues to work towards the resolution of stressed corporate exposures in bank balance sheets.
* Recent structural reforms improving business environment, transparency and increasing formalisation of the economy.
* Suggests concerted drive to restart stalled investment projects, enhance ease of doing business, including implification of the GST to boost growth.
* Suggests rationalisation of "excessively high" stamp duties charged by states, faster rollout of affordable housing programme.
* Next MPC meeting on 5-6 December.
Published Date: Oct 04, 2017 15:30 PM | Updated Date: Oct 04, 2017 15:30 PM