India's central banking institution keeps repo rate unchanged at 6.5 pct

Source: Xinhua| 2018-12-05 17:54:40|Editor: mym
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NEW DELHI, Dec. 5 (Xinhua) -- India's central banking institution Reserve Bank of India on Wednesday announced it has kept the repo rate unchanged at 6.5 percent.

Repo rate is the rate at which the central bank lends money to commercial banks in the event of shortfall of funds.

"On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.5 percent," read a statement issued by RBI.

"Consequently, the reverse repo rate under the LAF remains at 6.25 percent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 percent," it read.

The decision was announced by the bank's monetary policy committee (MPC) after a three-day deliberation.

In the six-member MPC the decision on keeping the policy rate unchanged was unanimous.

"While the decision on keeping the policy rate unchanged was unanimous, one member of the Monetary Policy Committee, Ravindra H Dholakia, voted to change the stance to neutral," the statement said.

In October, the RBI also had kept the repo rate unchanged at 6.5 percent.

Wednesday's decision came days after official data showed that gross domestic product (GDP) growth had slowed down to 7.1 percent in July-September from a more than two-year high of 8.2 percent in the previous quarter.

Meanwhile, the central bank projected the GDP for 2019-2020 at 7.4 percent, while inflation projection of second half of 2018-2019 is 2.7-3.2 percent.