GDP growth forecast for FY20 has been revised downwards from 6.1 per cent in the October policy to 5 per cent
The Reserve Bank of India (RBI) today announced its fifth bi-monthly monetary policy for the current fiscal. To everyone's surprise, the six-member monetary policy committee (MPC) of the RBI unanimously voted to maintains the repo rate at 5.15% in its three-day monetary policy meet, which ended on Thursday.
In its October meet, the RBI had cut the repo rate by 25 bps to 5.15 per cent. The RBI has cut borrowing costs by 135 basis points so far in 2019, to a nine-year low of 5.15%. The committee expects past monetary easing and measures taken by the government to feed into the real economy gradually.
While all 34 economists surveyed by Bloomberg News as of Wednesday had forecast a reduction, the majority expected a quarter-point cut, with the rest expecting reductions of 15 basis points to 50 basis points.
The committee also decided to continue with the accommodative stance as long as it is necessary to revive growth, while ensuring that inflation remains within the target. The meeting of the six-member Monetary Policy Committee led by Governor Shaktikanta Das, who completes one year in office next week, comes amid deepening concerns about growth, financial stability and weak public finances.
GDP growth forecast for FY20 has been revised downwards from 6.1 per cent in the October policy to 5 per cent.
The Reserve Bank of India (RBI) on Thursday raised its inflation projection to 5.1-4.7 per cent for the second half of the current fiscal on the back of spike in prices of vegetables such as onion and tomatoes.
The central bank had earlier estimated headline inflation at 3.5-3.7 per cent for the second half of the ongoing fiscal.
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