Govt welcomes MPC’s decision of keeping policy rate unchanged: DEA secretary

Garg said that MPC expects growth to accelerate in 2018-19 while inflation to converge back towards its target level in the second half of next fiscal year

The Reserve Bank of India on February 7 did not change repo. Image source: RBI

Department of Economic Affairs Secretary Subhash Chandra Garg said the government welcomes the Monetary Policy Committee's (MPC's) decision to keep the Policy rate unchanged at 6%.

The MPC in its 6th bi-monthly statement, issued on February 7, updated its inflation and real GDP growth projections for this year and for 2018-19.

Garg said that MPC expects growth to accelerate in 2018-19, while inflation to converge back towards its target level in the second half of next fiscal year.

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The Reserve Bank of India on February 7 did not change repo, the benchmark lending rate at which banks borrow from the central bank, and kept it at over six-year low of 6% as it was expected.

Wednesday’s status quo was third policy stance where RBI held rate since August 2017 when it had brought down the key lending rate by 25 basis points to 6% from 6.25%.

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Department of Economic Affairs Secretary Subhash Chandra Garg Monetary Policy Committee (MPC)Inflation fiscal year Financial Year Borrowing policy rate