RBI keeps policy rate unchanged at 6.25 per cent

The Reserve Bank of India (RBI) on Wednesday kept the policy rate unchanged at 6.25 per cent, but raised concerns over fiscal slippages in view of rush for farm loan waivers.​

The monetary policy committee (MPC), which is headed by RBI governor Urjit Patel left the rates unchanged amid most analysts expectation of maintaining a status quo on the policy rate, which stands at 6.25 per cent.​

Projecting the inflation in 2-3.5 per cent range for first half of 2017-18 and 3.5-4.5 per cent for second half, the RBI said, "Implementation of GST not expected to have material impact on overall inflation.

However, the RBI cut the Statutory Liquidity Ratio (SLR) by 0.5 per cent.

The Reserve Bank also cut the growth projection for current fiscal to 7.3%, from 7.4%. It also cautioned against rush of farm loan waivers and warned of risk on fiscal slippages and inflationary spillovers.

"Farm loan waivers can lead to fiscal slippages, undo work on fiscal deficit done over last two years," said Urjit Patel.

Union Finance Minister Arun Jaitley on Monday hoped for cut in the interest rate citing good monsoon and no surge in oil prices.