The Reserve Bank of India (RBI) on Thursday kept the repo rate and reverse repo rate unchanged at 6 percent and 5.75 percent respectively.
The real Gross Domestic Product (GDP) growth in FY19 is seen at 7.4 percent as against 6.6 percent in FY18, the central bank’s six-member Monetary Policy Committee (MPC) in its bi-monthly Monetary Policy Statement, noted.
The apex bank said that the models suggest FY20 real GDP growth will range from 7.4 percent to 7.9 percent.
“Over the past two days, the MPC reviewed evolving global and domestic macroeconomic conditions and decided to hold the repo rate at six percent, while continuing with the neutral stance of monetary policy. In doing so, the MPC reiterated its commitment to keep inflation at the target of four percent in the medium term and to remain vigilant on how actual inflation unfolds. In other words, we continue to be data dependent,” said RBI Governor Urjit Patel.
Patel also noted that potential trade wars on the global front pose a threat to the Indian economy as well.
“The MPC noted that while global economic activity and trade have gathered momentum, financial market volatility, potential trade wars, pose a threat to the outlook. Moreover, crude oil prices have become volatile in the recent period. Considerable uncertainty persists about the pace of normalisation,” he added.
Meanwhile, the RBI has maintained status-quo on the key short-term borrowing rates or repo rate in its last three policy meets before today as well.