RBI announces monetary policy, keeps repo rates unchanged

The Reserve Bank of India (RBI), in its first bi-monthly monetary policy review for 2018-19 on Thursday kept both repo rate and reverse repo rate unchanged at 6.25% and 5.75%, respectively.

“On the basis of an assessment of the current and evolving macroeconomic situation1 at its meeting today, the Monetary Policy Committee (MPC) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.0 per cent,” RBI said in a statement.

The reverse repo rate under the LAF remains at 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.25 per cent, the central bank said.

The announcement came after a two-day Monetary Policy Committee (MPC) meeting which started on Wednesday in Delhi. The meeting was headed by RBI Governor Urjit Patel.

The RBI has kept the key short-term borrowing rate (repo) unchanged in its last three policy meetings.

The benchmark lending rate was reduced by 0.25 percentage points to 6 per cent last August, bringing it to a 6-year low.

The RBI, however, was under pressure to further cut interest rates in the wake of declining retail inflation and the need to fuel growth momentum.

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Early on Wednesday, the Skymet Weather projected a normal monsoon, indicating good agriculture output and less pressure on prices.

Banks given three months to stop dealing in Bitcoins

The RBI has asked banks to stop dealing in virtual currencies such as Bitcoin. The banks were given three months to "unwind" the existing relations in three months. 

"To ring fence the RBI regulated entities (banks) from the risk of dealing with entities associated with virtual currencies, they (banks) are required to stop having business relations with the entities dealing in virtual currencies forthwith. And (they are also required to) unwind the existing relation in three months," said B P Kanungo, deputy governor of RBI.

(With inputs from agencies)