Repo rate unchanged for third time in a row at 6.25%

Reserve Bank of India (RBI) Governor Urjit Patel kept the repo rate unchanged for the third time in a row at 6.25% in the first monetary policy of the current financial year on Thursday. However, the reverse repo rate has been increased to 6%.

Marginal Standing Facility (MSF) and the bank rate have been fixed at 6.50%. RBI also went to add that the GVA growth is projected to be 7.4% in 2017-18 as compared to 6.7% in 2016-17.

In its last policy review of the previous fiscal in February, had kept its key policy rate unchanged along with marginal standing facility rate, reverse repo rate and bank rate.

In October, Urjit Patel's first policy review as the RBI Governor, which was also the maiden review of the MPC, the repo rate was reduced by 0.25% to 6.25%.

Since then, the repo rate has been retained at 6.25%. However, since January 2015 the RBI has cut repo by 1.75%. In the last policy, the six members of the MPC voted in favour of holding rates amid hopes that the central bank will lower borrowing costs given the surge in bank deposits and slower pace of economic growth followed by the demonetization. 

(With agency inputs)