On the basis of an assessment of the current and evolving macroeconomic situation at its meeting, the Monetary Policy Committee (MPC) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.0 percent.
Consequently, the reverse repo rate under the LAF remains at 5.75 percent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.25 percent.
RBI stated that the decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 percent within a band of ± 2 percent while supporting growth.
RBI Governor Urjit Patel, said, "The recent reforms undertaken will help pick up the rate of growth."
On recapitalization of banks, he said, "Bank recapitalization plan is a reform as well as recap package."
Viral Acharya, Deputy Governor, said, " Liquidity conditions continued to normalise gradually during the year. The overhang of liquidity surplus in banking system forced the withdrawal of specific bank notes in Nov 2016, touched the peak of close to Rs 7.96 trillion at year's beginning and now come down.