RBI keeps repo rate unchanged at 5.15%, here are the key takeaways

RBI keeps benchmark interest rate unchanged at 5.15% Mumbai, Dec 5 (PTI) The Reserve Bank of India on Thursday kept the key policy rate unchanged at 5.15 per cent and decided to continue with its accommodative stance to support the economy.

The central bank also revised GDP growth downwards to 5 per cent for 2019-20 from 6.1 per cent projected in its October policy.

"The Monetary Policy Committee 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 monetary policy for this fiscal.

The panel decided to continue with the accommodative stance as long as it is necessary to revive growth, while ensuring that inflation remains within the target.

All the six members of the MPC voted in favour of a rate pause.

The CPI inflation projection is revised upwards to 5.1-4.7 per cent for H2 FY20 and 4-3.8 per cent for H1 FY21.

Between February and October 2019, the RBI has reduced repo rate by 135 basis points.


Repo rate unchanged at 5.15%

Reverse repo rate stays unchanged at 4.90%

MSF, Bank Rate unchanged at 5.40%

MPC unanimously votes for status quo on repo rate

Based on CPI-GDP dynamics, MPC felt pause was appropriate

MPC recognises "there is monetary policy space for future"


MPC to continue with accommodative stance

MPC's accommodative stance "as long as it is necessary"

MPC stance aimed to revive growth while ensuring CPI in band


CPI projection raised to 4.7-5.1% Oct-Mar

CPI projection raised to 3.8-4.0% Apr-Sep 2020

Risks to inflation projections "broadly balanced"

MPC sees inflation rising in near-term

MPC sees CPI moderate below target by Jul-Sep 2020

Need to carefully monitor fresh data for CPI outlook clarity


FY20 real GDP growth seen 5.0% from 6.1% set in Oct

Oct-Mar GDP seen 4.9-5.5%

Apr-Sep 2020 GDP seen 5.9-6.3%

MPC notes economic activity has weakened further

MPC sees govt, policy steps gradually feed into real economy

Data showing some early signs of recovery in invest activity

Need to see sustainability of investment activity recovery

MPC sees need to address impediments holding back investment

MPC sees external benchmarks strengthen monetary transmission

Need greater flexibility in small savings rate adjustments

See FY21 Budget provide insight into further steps by govt

See FY21 Budget shed light on govt policy impact on growth

MPC meeting minutes to be published on Dec 19

Next MPC meeting to be held from Feb 4-6

Delay in domestic demand revival downside risk for GDP

Slower domestic demand reflecting in softening in CPI

See price rise in milk, pulses, sugar sustaining

Oct CPI print "was much higher than expected"

FX reserves at $451.7 bln on Dec 3, up $38.8 bln from Mar 31

Net disbursals of FX borrowings up $11.5 bln Apr-Oct

Median bank term deposit rates down 47 bps Feb-Nov

Bank deposit rate down by 9 bps Oct vs just 7 bps in Feb-Sep

Fall in deposit rate augurs well for loan rate transmission

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