The Reserve Bank of India (RBI) on Thursday kept its repo rate at which it lends to banks unchanged at 5.15% as it maintained an “accommodative stance” to revive growth amid a sagging economy.
This is the second consecutive bi-monthly monetary meeting in this fiscal year 2019-20 in which the repo rate has been kept unchanged. Earlier, RBI had in December last year kept interest rates unchanged after five consecutive cuts.
The reverse repo rate at which RBI borrows from banks too was kept unchanged at 4.90% and the marginal standing facility (MSF) rate and the bank rate at 5.40%, the central bank said in a statement.
The decision on the rates is the first after the Union Budget was presented on February 1 as the government announced huge packages for farming and infrastructure.
The Indian economy is forecast to grow at the rate of 5% in the year ending in March—the weakest pace in 11 years. However, the economy has recently shown signs of recovery.
RBI’s six-member Monetary Policy Committee (MPC) began its three-day monetary policy meet on Tuesday.
Domestic stock markets started on on a positive note ahead of the outcome of RBI’s sixth bi-monthly policy review of the current fiscal year.
The S&P BSE Sensex index rose 199.53 points to 41,342.19 in early trade and the broader NSE Nifty benchmark climbed to as high as 12,151.25, up 62.1 points from the previous close.
