RBI keeps repo rate unchanged at 6 per cent

The Reserve Bank of India (RBI) on Wednesday kept its key lending rate the repo rate unchanged at 6 percent as widely expected.

The reverse repo rate will remain at 5.75 per cent. The Central bank revised the growth projection down to 6.7 per cent.The Reserve Bank of India's fourth bi-monthly monetary and credit policy review came at a time when the government is grappling with a slowing economic growth, whereas the central bank is staring at a rising headline inflation. The six member monetary policy committee (MPC), headed by RBI governor Urjit Patel, voted in favour of the decision.

The committee also did not tweak the cash reserve ratio (CRR), which remained unchanged at 4 per cent, but cut statutory liquidity ratio (SLR) requirement by 50 basis points to 19.5 per cent. Last week, a top finance ministry official said there is scope for an RBI rate cut at the next policy review as retail inflation continues to be low. In its last policy review in August, the RBI reduced the repo rate by 0.25 per cent to 6 per cent in August, citing reduction in inflation risks. The rate cut was the first in 10 months and brought policy rates to a near 7-year low. However, retail inflation rose to a five-month high of 3.36 per cent in August due to costlier vegetables and fruits. The consumer price index (CPI) based inflation was 2.36 per cent in July.