RBI KEEPS REPO RATE UNCHANGED AT 6.5%

The Reserve Bank of India (RBI) kept its policy rates unchanged on Wednesday, as was widely expected, and cut its inflation forecast for the rest of the financial year, citing a sharp fall in crude oil prices and food “deflation”. The central bank also introduced proposals to improve policy rate transmission and credit discipline, besides initiating a predictable liquidity injection over the next six quarters, starting January, through a phased reduction of 25 basis points (bps) every quarter in statutory liquidity ratio (SLR). The six-member monetary policy committee (MPC) voted unanimously to keep the policy rate unchanged at 6.5%. Barring Ravindra Dholakia, the MPC voted in favour of maintaining the earlier stance of “calibrated tightening”. Dholakia, known for his dovish stance, voted to change the stance to neutral.