The Reserve Bank of India (RBI) kept the repo rate — the rate at which it lends money to commercial banks — unchanged at 6.50 percent. The reverse repo rate was also kept unchanged at 6.25 percent. Reverse Repo rate is the rate at which the central bank borrows money from commercial banks.

"The decision of the MPC is consistent with the stance of calibrated tightening of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent," said the central bank in its statement.

Here are the key takeaways

The five out of six members in the monetary policy committee voted in favour of stance to change to 'calibrated tightening'.

The new 'calibrated tightening' stance means that there will be no rate cuts until the stance changes, according to reports.

The GDP growth target for this financial year is kept unchanged at 7.4 percent.

The GDP growth target for the second half of the current fiscal has been revised to 7.1-7.3 percent range from the earlier 7.3-7.4 percent.

GDP growth for the next financial year has been predicted to 7.6 percent.

The consumer price inflation(CPI) inflation target for the second half of this financial year has been revised between 3.9 and 4.5 percent from 4.8 percent.

For the current financial year, the central fiscal deficit has been projected to 3.3 percent.

The fiscal gap for the state and centre is projected at 5.9 percent.

Oil prices remain vulnerable to further upside pressures, especially if the response of oil-producing nations to supply disruptions from geopolitical tensions is not adequate, the MPC said.

Global headwinds in the form of escalating trade tensions, volatile and rising oil prices, and tightening of global financial conditions pose substantial risks to the growth and inflation outlook, the central bank statement said.

The manufacturing and services PMIs also reported an increase in input costs and selling prices in Q2, reflecting a pass-through of higher costs to clients, the statement said.

First Published:Oct 5, 2018 3:23 PM IST