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RBI keeps Repo Rate unchanged at 6.50%

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New Delhi, Oct 5: Amid volatile economic situation due to falling Rupee, the Reserve Bank of India (RBI) on Friday kept the repo rate unchanged at 6.5 per cent.

The Reserve Bank of India

The six-member monetary policy committee (MPC) today announced the fourth bi-monthly policy statement for fiscal 2018-19. The RBI retained GDP growth estimate at 7.4 percent for fiscal year ending in March 2019.

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"Depreciation of Rupee against US Dollar has been comparatively moderate in comparison to currencies of other EMEs (emerging markets economies)," said RBI Governor Urjit Patel during the monetary policy announcement.

According the reports, experts had expected the RBI to hike the repo rate by 25 basis points or by 0.25 per cent.

The following are the highlights of the fourth bi-monthly monetary statement for 2018-19:

  • RBI keeps key lending rate (repo) unchanged at 6.5 pc
  • Reverse repo rate stands at 6.25 pc, bank rate at 6.75 pc, CRR at 4 pc
  • Projects retail inflation to rise to 3.8-4.5 pc in October-March * Retains GDP growth estimate at 7.4 pc for current fiscal
  • Global economic activity becoming uneven, outlook clouded by uncertainties
  • Excise cut in petrol and diesel will moderate retail inflation
  • Rise in oil prices may have a bearing on disposable incomes, dent profit margins of corporates
  • Oil prices remain vulnerable to further upside pressures
  • Global, domestic financial conditions tightened, may dampen investment activity
  • Exports outlook uncertain
  • Fiscal slippage at the centre/state to have a bearing on the inflation outlook, besides heightening market volatility and crowding out private investment
  • Inflation outlook needs a close vigil over the next few months, several upside risks persist
  • Trade tensions, volatile and rising oil prices, and tightening global financial conditions pose substantial risks to growth, inflation outlook
  • Calls for further strengthening of domestic macroeconomic fundamentals
  • Next meeting of the MPC on December 3-5.
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