New Delhi: In the first pause after five consecutive rate cuts, the Reserve Bank of India kept its interest rates unchanged at 5.15 per cent in the meeting of the Monetary Policy Committee on Thursday. A cut in the rates by 25 basis point was, however, expected despite the spiking inflation. The central bank has also lowered its GDP growth forecast for the entire year to 5 per cent from 6.1 per cent.
The RBI said it will maintain an “accommodative stance as long as it is necessary”.
RBI has revised its retail inflation projection upwards to 5.1-4.7 pc for the second half of this fiscal. The rupee slipped 8 paise to 71.61 against USD after RBI leaves the policy rate unchanged
“There is space for monetary policy action, but there is a need to optimise the actions on rate reductions,” said Governor Shaktikanta Das. Some green-shoots on growth visible, but it’s too premature to assume how sustainable they are, the Governor said.
Inflation has increased sharply in November and may stay high for some time, the Governor said.
The meeting of the six-member Monetary Policy Committee was led by governor Shaktikanta Das, who will complete one year in the office next week.
The country’s Gross Domestic Product grew at 4.3 per cent in the quarter between July and September, which is the lowest since January-March in 2013 when the GDP grew at 4.3 per cent. The GDP data was even worse than the estimates of 4.7 per cent that the economists expected.