The Reserve Bank of India (RBI) in its last bi-monthly monetary policy committee (MPC) meeting of the year on Thursday has maintained the key repo rate at 5.15 percent while keeping its policy stance as "accommodative." The RBI's decision comes against the wider expectation of a rate cut. The current 5.15 percent rate is the lowest in nine years. The MPC was led by the RBI governor Shaktikanta Das and all six members voted in favour of the decision.

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Elaborating upon the decision to keep the repo rate unchanged, Das said that there have been "signs of resilience" in the economy since October—when the MPC cut the repo rate by 25 basis points—while inflation has been benign.

>> These are the highlights from the MPC meeting

"The monetary policy committee had discussions during December 3rd, 4th and 5th, it deliberated extensively on the current and evolving macro-economic and financial conditions and the outlook. Based on its considered assessment the MPC voted unanimously to keep the policy rate unchanged. It however decided to continue with the 'accommodative' stance as long as it is necessary to revive growth while ensuring that inflation remains within the target," he said at a press conference in Mumbai.

Das added: "The MPC noted that since its meeting in October 2019, global economic activity has remained subdued, though some signs of resilience are becoming visible. Growth has shown signs of picking up in some advanced economies and emerging market economies. Crude oil prices have moved in a narrow range in both directions reflecting the constantly changing sentiments relating to progress in the US-China trade talks. Inflation has generally remained benign in major advanced economies and emerging market economies in Q3 of 2019.

On domestic developments, the governor said, “The real GDP growth moderated to 4.5 percent YoY in Q2 2019-20. Extending the deceleration to the sixth consecutive quarter.

"The slowdown in GDP growth was cushioned by a jump in government final consumption expenditure. On the supply side gross value added (GVA) growth decelerated to 4.3 percent in Q2 ’19-20, pulled down by contraction in manufacturing. Growth in the services sector moderated but agricultural GVA growth increased marginally. Beyond Q2 there are several positive developments which could turn out to be green shoots depending on how they evolve,” he added.“Rabi sowing is catching up from the setback caused by delay in kharif harvesting and unseasonal rainfall in October and early November,” he added.

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First Published:Dec 5, 2019 12:36 PM IST