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India's Central Bank Keeps Rates Unchanged

India's central bank left its key interest rates unchanged after cutting by a quarter point in August.

At the fourth bi-monthly monetary policy statement, the monetary policy committee of Reserve Bank of India, on Wednesday, decided to maintain the repo rate at 6.00 percent and the reverse repo rate at 5.75 percent.

The bank lowered the statutory liquidity ratio by 50 basis points to 19.50 percent.

In August, headline inflation was projected at 3 percent in the second quarter and 4.0-4.5 percent in the second half of 2017-18. Actual inflation outcomes so far have been broadly in line with projections, the bank said.

Some price revisions pending the goods and services tax implementation have been taking place, RBI said. Inflation is forecast to rise from its current level and range between 4.2-4.6 percent in the second half of this year.

On growth projection, RBI said the implementation of the GST so far also appears to have had an adverse impact, rendering prospects for the manufacturing sector uncertain in the short term.

The bank downgraded the projection for real GVA growth for 2017-18 to 6.7 percent from the August 2017 projection of 7.3 percent, with risks evenly balanced.

by RTT Staff Writer

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