India's central bank keeps repo rate on hold at 6.25%, projects inflation at 5%

The RBI kept the Repo rate unchanged amid an uncertain global economic environment. Photograph:( Reuters )

Reuters Mumbai, Maharashtra, India Apr 06, 2017, 09.41 AM (IST)

The Reserve Bank of India kept its repo rate at 6.25 per cent for a third consecutive policy meeting on Thursday as it continues to guard against any potential flare-up in inflation and an uncertain global economic environment.

RBI has projected inflation at 4.5 per cent for first half of 2017-18 and 5 per cent for the second half of the year. "Upside risk to inflation arises from one-off effect of Goods and Services Tax," RBI chief Urjit Patel, RBI governor said at a press conference. 

Several indicators point to modest improvement in micro-economic outlook, RBI governor added.

The central bank has projected GDP growth at 7.4 per cent for the current fiscal, up from 6.7 per cent in 2016-17. Urjit Patel said risk is evenly balanced around inflation trajectory with upside risk from uncertainty about monsoon.

(WION with agency inputs)

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