Breaking News: RBI leaves repo rate unchanged at 6.25%

The Reserve Bank of India (RBI) left the repo rate unchanged for the fourth time in a row at 6.25%.

RBI Governor Urjit Patel cut SLR by 50 basis points to 20% starting from June 24.

The reverse repo rate remained at 6% and the marginal standing facility rate and the bank rate at 6.50%.

The Monetary Policy Committee (MPC) decided to maintain status quo as inflation is below forecast and economy has slowed down than expectations.

The MPC is keen to avoid ‘premature’ action at this stage and it rationalised risk weights, loan-to-value norms on home loans.

The MPC maintained neutral stance with the objective of achieving the medium target for consumer price index inflation of 4%, while supporting growth.

Meanwhile five members of the MPC were in favour of keeping the interest rate unchanged, while one did not agree.

The MPC said premature action at this stage risks disruptive policy reversals later and the loss of credibility.

Also, the RBI is dealing with excess liquidity.

The consumer price inflation for April is below RBI’s forecast of 4.5% in the six months to September, and 5% for the six months through to March next year.