RBI keeps Repo Rate unchanged, slashes GDP growth projection to 5 per cent
Mumbai/IBNS/UNI: The Reserve Bank of India (RBI) on Thursday kept the Repo Rate unchanged at 5.15 pc but slashed the Gross Domestic Product (GDP) growth projection to 5 per cent on Thursday.
Earlier, the RBI had reduced the Repo Rate for last five successive occasions.
The growth projection has been slashed from its previous forecast of 6.1%.
The RBI has kept the Repo Rate unchanged observing inflation is likely to go up in near future.
Announcing the fifth bi-monthly policy, RBI Governor Shaktikanta Das said "The MPC recognises that there is monetary policy space for future action. However, given the evolving growth-inflation dynamics, the MPC felt it appropriate to take a pause at this juncture."
"Keeping the rate unchanged, and continue with the accommodative stance as long as it is necessary to revive growth, while ensuring that inflation remains within the target," the RBI said in a statement.
RBI's five interest rate cuts since the start of the year hasn't stopped India's economy from slowing to its weakest growth rate since 2013.
The economy grew at 4.5 per cent annually in the June-September quarter, its weakest pace in over six years.
The GDP data released last month showed government spending helping to prop up weak demand, but private investment growth had virtually collapsed.
The annual retail inflation rose to 4.62 per cent in October, climbing above four per cent for the first time in 15 months and up from 3.99 per cent in September.
The September industrial output too contracted to 4.3 per cent, following a decline of 1.4 per cent in August.
At its policy review in October, the RBI sharply lowered its growth projection for 2019/20 (April-March) by 80 bps to 6.1 per cent.
All members of the MPC voted in favour of the decision.
RBI revised its GDP growth outlook for 2019-20 downwards from 6.1 per cent in the October policy to five per cent.