RBI Leaves Monetary Policy Unchanged; Revises Inflation Forecast Upwards

The Reserve Bank of India (RBI) in its sixth bi-monthly monetary policy statement for 2019-20, decided to continue with the accommodative stance as long as it is necessary to revive growth, while ensuring that inflation remains within the target. RBI's policy repo rate current stands at 5.15%. MPC policy statement blames the unusual spike in onion prices for the surge in inflation. The RBI has also revised CPI inflation projection upwards to 6.5% for Q4 of 2019-20, with risks broadly balanced. GDP growth for FY 2020-21 has been projected at 6%. RBI said these decisions are 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.

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