RBI Keeps Repo Rate Unchanged At 6.25% For Second Straight Meeting

The Monetary Policy Committee signalled that the interest rate cutting cycle may be over for now.

RBI Governor Urjit Patel. (Photo: Reuters)

The Monetary Policy Committee on Wednesday kept its benchmark policy rate unchanged for a second consecutive meeting. It also signalling that the interest rate cutting cycle may be over for now.

The committee cited sticky core inflation, which is likely to keep inflation above the 4 percent in fiscal 2018. While the committee expects growth to decelerate to 6.9 percent in the current year, it forecasts a steep rebound in growth to 7.4 percent next year.

Following today’s meeting, the repo rate stands at 6.25 percent. The Reserve Bank of India – or RBI – has cut rates by 175 basis points since the start of 2015, when the rate reduction cycle began.

The decision of the Monetary Policy Committee is consistent with a neutral stance of monetary policy in consonance with the objective of achieving consumer price index inflation at 5 percent by Q4 of 2016-17 and the medium-term target of 4 per cent within a band of +/- 2 percent, while supporting growth.

Monetary Policy Committee statement 

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