Monetary policy: RBI keeps repo rate unchanged at 6.25%, lowers GDP growth estimate to 7.1%

India's central bank, Reserve Bank of India kept the repo rate unchanged at 6.25 percent in its latest monetary policy review meeting on Wednesday, despite growing calls for easing the monetary policy following the cash crunch in the economy post the government's demonetisation move. 

The Reserve Bank of India's monetary policy committee voted 6-0 to leave the repo rate unchanged, after cutting it by 25 basis points (bps) at its last review in October.

The RBI kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25 per cent. Consequently, the reverse repo rate under the LAF remains unchanged at 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent.

The decision of the MPC is consistent with an accommodative stance of monetary policy in consonance with the objective of achieving consumer price index (CPI) inflation at 5 per cent by Q4 of 2016-17 and the medium-term target of 4 per cent within a band of +/- 2 per cent, while supporting growth.