Reserve Bank keeps interest rates unchanged

RBI’s monetary policy committee kept key interest rates unchanged, but softened its hawkish stance after retail inflation and economic growth slowed sharply. While the reporate—at which the central bank infuses liquidity in the banking system—has been kept unchanged at 6.25%, the RBI lowered its inflation forecast for the current fiscal.

The MPC has projected headline inflation at 2-3.5% in the first half of the year and 3.5-4.5% in the second half. Economists see this as an indication that the central bank may be accommodative on the future course of rates in a bid to revive economic growth.