RBI MPC holds repo rate at 5.25%, maintains neutral stance
Consequently, the standing deposit facility (SDF) rate remains at 5%, and the marginal standing facility (MSF) rate and the Bank Rate remain at 5.50%.
Consequently, the standing deposit facility (SDF) rate remains at 5%, and the marginal standing facility (MSF) rate and the Bank Rate remain at 5.50%.
The MPC has also revised the average headline inflation for this year to 2.6 per cent from the earlier projection of 3.7 per cent in June and 3.1 per cent in August.
RBI Governor Shaktikanta Das attributed comfortable inflation and firm growth dynamics as the reasons behind keeping the repo rate unchanged.
In its last three meetings in April, June, and August, the RBI kept the repo rate unchanged at 6.5 per cent.
Faced with elevated retail inflation in August, the Reserve Bank of India is expected to raise interest rates in the range of 35-50 basis points in its next monetary policy committee meeting, said SBI Research.
The Monetary Policy Committee (MPC), headed by the Governor Shaktikanta Das, also decided to keep the reverse repo rate at 3.35 per cent.
Union Bank of India managing director and CEO Rajkiran Rai said, There is a possibility of 25 basis points cut or they may hold on (the rate).
In a bid to keep inflation under a specified level, the government in 2016 had decided to set up Monetary Policy Committee headed by RBI Governor.
Meanwhile, the apex bank has projected the GDP growth for FY21, starting April 1, at 6 per cent while retaining the estimate for the current financial year at 5 per cent.
The RBI's fifth policy statement of the current financial year comes at a time when the GDP growth rate has slipped to a six-year low for the September quarter.
