The Reserve Bank of India (RBI) on Wednesday kept its key lending rate—the repo rate—unchanged at 6 percent, dashing hopes of lower borrowing costs for households and the companies ahead of the festival season.
The six member monetary policy committee (MPC), headed by RBI governor Urjit Patel, kept one eye firmly on the rising inflation that is perilously inching towards the RBI’s 4 percent threshold level.
In August, the MPC had recommended a 25 basis point (0.25 percentage point) cut in the repo rate to 6 percent. Business leaders have been arguing for a repeat action to revive investment, spur spending and aid a turnaround in the broader economy’s growth that has slumped to a 13-quarter low of 5.7 percent in April-June.
The central bank and the MPC also made it clear that it stood firmly on the side of inflation control in the growth-inflation trade off.
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