INSUBCONTINENT EXCLUSIVE:
Consumer inflation has crossed the RBI's 4% medium-term target for the first time in more than a year.The Reserve Bank of India's six-member
Monetary Policy Committee (MPC) unanimously kept the repo rate unchanged at 5.15 per cent on Thursday
to 5 per cent for the current financial year while maintaining an "accommodative" stance, after inflation breached its medium-term target of
70 economists by news agency Reuters had predicted the RBI to cut its repo rate by 25 bps and then by another 15 bps in the second quarter
of 2020, where it will stay at least until 2021."The MPC recognises that there is monetary policy space for future action
However, given the evolving growth-inflation dynamics, the MPC felt it appropriate to take a pause at this juncture," the RBI said in its
fifth bi-monthly policy statement of 2019-20."The MPC also decided to continue with the accommodative stance as long as it is necessary to
revive growth, while ensuring that inflation remains within the target," the RBI said.The RBI expects gross domestic product (GDP) to grow
at 5 per cent in the current financial year down from its expectation of growth of 6.1 per cent in October policy.All members of the MPC -
Chetan Ghate, Pami Dua, Ravindra H Dholakia, Michael Debabrata Patra, Bibhu Prasad Kanungo and Shaktikanta Das - voted in favour of the
decision to hold the key interest rate.The Reserve Bank of India raised its inflation forecasts
The central bank now expects inflation at 5.1-4.7 per cent in second half of the current financial year, and 4.0-3.8 per cent in the first
half of financial year 2020-21.
