India’s central bank left its policy repo rate steady at 5.15 percent, surprising financial markets that had expected another rate cut to boost a slowing economy, but said it was still ready to cut if needed and would “continue with an accommodative monetary policy stance as long as it is necessary to revive growth, while ensuring that inflation remains within the target.”
The Reserve Bank of India (RBI), which has cut its key rate five times this year by a total of 135 basis points, said its monetary policy committee felt it was appropriate to pause at this point as past easing and government measures are expected to boost growth while inflation is expected to ease.
RBI’s decision underscores the pause many central banks are now taking following a flurry of rate cuts this year that is expected to revive global growth that has slowed due to a fall in global trade and investments from the uncertainty unleashed by the trade conflict between the U.S. and China.
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The Reserve Bank of India released the fifth bi-monthly monetary policy statement followed by a statement Governor Shri Shaktikanta Das:
- keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 5.15 per cent.
- 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.