The Reserve Bank of India’s (RBI) monetary policy committee (MPC), led by Governor Shaktikanta Das, has decided keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 5.15 per cent in its sixth Bi-monthly Monetary Policy, 2019-20. Consequently, the reverse repo rate under the LAF remains unchanged at 4.90 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 5.40 per cent.
The MPC 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. 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.
RBI further revised the CPI inflation projection upwards to 6.5 per cent for Q4:2019-20; 5.4-5.0 per cent for H1:2020-21; and 3.2 per cent for Q3:2020-21, with risks broadly balanced. Turning to the growth outlook, gross domestic product (GDP) growth for 2020-21 is projected at 6.0 per cent, in the range of 5.5-6.0 per cent in H1 and 6.2 per cent in Q3.
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