Mumbai: The Reserve Bank of India on Wednesday kept benchmark lending rate, repo rate, unchanged at six and a half years low of 6.25 per cent. With this the reverse repo rate remains at 6 per cent.
"The decision of the MPC is consistent with a neutral stance of monetary policy," RBI said in a press statement. The central bank has fixed a 4 per cent consumer price index or CPI inflation target within a band of +/-2 per cent.
This was yet another policy rate determined by Monetary Policy Committee that was formed to evaluate key lending rates. The MPC has six members -- governor Urjit Patel, two deputy governors and three government representatives.
The RBI while calculating the repo rate at 6.25 per cent cited latest data released by Central Statistics Office on India's national income. It also referred to the fourth quarter GDP growth that came at 6.1 per cent.
"The growth of real gross value added (GVA) for 2016-17 has been
pegged at 6.6 per cent, 0.1 percentage point lower than the second advance estimates released in February 2017," RBI said.
Underlying the revision is a downward adjustment in services sector growth in
Q4 for the constituents of construction, financial and professional services, and real estate, RBI added.
A poll conducted by news agency Reuters showed 56 of 60 analysts expected the RBI will go for a status quo in monetary policy meet today. This is fourth meeting in a row that has not touched repo rate. Analysts had also predicted that the central bank would not change reverse repo rate that was at 6.00 per cent.