The Reserve Bank of India (RBI) on Wednesday expectedly kept interest rates unchanged at 6.5 per cent but held out a promise to cut them if the upside risks to the inflation do not materialise. All the six members of the monetary policy committee voted for a hold on the rates.
The RBI also coaxed banks to lend more in order to support the slowing economy.
The central bank lowered retail inflation projection to 2.7-3.2 per cent for the second half of the current fiscal, citing normal monsoon and moderate food prices.
It retained its GDP forecast for the current fiscal at 7.4 per cent and said growth will accelerate to 7.5 per cent in first half of 2019-20.
Commenting on the RBI’s policy announcement, the Ministry of Finance said assessment of the RBI with regard to growth and inflation is same as that of the Government.
India Inc too said RBI’s status quo decision was on expected lines in view of headwinds, though it sought more measures by the RBI to improve the credit flow to the economy.