RBI keeps Repo unchanged, upgrades GDP growth

Mumbai: The Reserve Bank of India (RBI) on Friday expectedly left its key lending rates unchanged for the fifth consecutive time and predicted faster growth in the world’s fastest-growing major economy amid an uncertain outlook on inflation ahead of elections. The six-member Monetary Policy Committee (MPC), consisting of three RBI and an equal number of external members, voted unanimously to keep the benchmark repurchase rate at 6.5 per cent. All but one of the panel members voted to keep the policy stance at ‘withdrawal of accommodation’ in signs that rates may remain higher for longer.

The central bank raised its forecast for economic growth to seven per cent from 6.5 per cent, maintaining India’s position as the world’s fastest-growing major economy, after a stronger-than-expected 7.6 per cent growth in the July-September quarter.

“Growth has been resilient and robust, surprising everyone,” RBI Governor Shaktikanta Das said announcing the MPC decisions. The encouraging signs, including an expanding manufacturing PMI and healthy growth in eight core industries, underline confidence in sustained robust growth.