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)
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)