RBI keeps key rates unchanged

TIL Desk/Business/Mumbai/ The Reserve Bank of India (RBI) Wednesday expectedly kept interest rates unchanged but held out a promise to cut them if the upside risks to the inflation do not materialise. It also coaxed banks to lend more in order to support the slowing economy.

With all the six member of the monetary policy committee (MPC) voting for a hold on rates, the RBI kept benchmark repurchase (repo) rate at 6.5 per cent. Having raised rates twice this year, the central bank retained its ‘calibrated tightening’ policy stance.

“Even as inflation projections have been revised downwards significantly and some of the risks pointed out in the last resolution have been mitigated, especially of crude oil prices, several uncertainties still cloud the inflation outlook,” it said in a statement.

While the statement was silent on future outlook on interest rates, RBI Governor Urjit Patel at the customary post MPC meeting press conference held out hope of a reduction if upside risks to inflation did not materialise.