The central bank said that several uncertainties, including the risk of sudden reversal in food prices, uncertain outlook on crude oil prices and possible fiscal slippage, were clouding the inflation outlook.
On the basis of an assessment of the current and evolving macroeconomic situation at its meeting, the Reserve Bank of India (RBI) made a decision to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.5 per cent. The central bank assured enough liquidity for the financial system, stating that it may step up the frequency and quantum of open market operation purchases of government securities till March-end. The RBI has also maintained the GDP for 2018-19 at 7.4 per cent.
RBI Governor Urjit Patel-led monetary policy committee (MPC) on Wednesday kept key rates unchanged for the second consecutive time this year.
This is for the second time in a row that the central bank did not tinker with the interest rate.
Así reaccionó el dólar ante la eliminación del piso de la tasa
Pero también precisó que comprará "hasta 50 millones por día" en diciembre mediante licitaciones si la divisa perfora el piso . Por último, el Copom definió los límites de las bandas de flotación para el primer trimestre de 2019 .
Governor Patel also ruled out any possibility of a cut in cash reserve ratio (CRR) to enhance liquidity.
The rupee eased to 70.60 to the dollar from 70.50 before the policy statement, while the broader Nifty was down 0.8 percent at 3:39 pm. It expects inflation to quicken to 3.8-4.2% in the first half of the following year.
"Taking all these factors into consideration and assuming a normal monsoon in 2019, inflation is projected at 2.7-3.2 per cent in H2 FY2018-19 and 3.8-4.2 per cent in H1 FY2019-20, with risks tilted to the upside", the RBI said. The economic growth in the second half of 2018-19 has been predicted at nearly 7.3 per cent.
Earlier in its bi-monthly monetary policies review held in June and August 2018, the central bank had raised the repo rate by 25 basis points (bps).
But, there are now clearer economic reasons for India to avoid going higher, analysts say. "We perceive that India is slowly entering into a low inflation, slowing growth quadrant".