Mumbai, Aug 6 || RBI Governor Sanjay Malhotra announced on Wednesday that the monetary policy committee has decided to keep the repo rate unchanged at 5.5 per cent, while sticking to the “neutral” monetary policy stance.
He said the decision was taken unanimously by the MPC after a detailed assessment of the macroeconomic situation and the growth-inflation dynamics.
A neutral stance requires neither stimulation nor curbs on liquidity as it strikes a fine balance between controlling inflation without hurting growth.
The RBI Governor said that inflation had come down to much lower levels there was still some volatility in food prices, especially vegetables. However, core inflation had remained steady at around 4 per cent.
He also said that the good monsoon and the upcoming festive season were expected to spur economic activity.
The RBI Governor said that the Indian economy was expected to post robust growth in the medium term amid the global trade uncertainty, backed by supportive policies of the Government and the RBI.
He highlighted that the bright prospects for the Indian economy come amid the muted growth and an uptick in inflation in the world economy.