Reserve Bank of India keeps key policy rate unchanged at 6.50 per cent

Mumbai: The Reserve Bank of India (RBI) on Wednesday kept the repo rate unchanged at 6.50 per cent while maintaining the stance of 'calibrated tightening' of policy.

This is for the second time in a row that the central bank did not tinker with the interest rate.

"The decision of the Monetary Policy Committee (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 within a band of +/-2 per cent, while supporting growth," RBI said.

The MPC was meeting for its fifth bi-monthly Monetary Policy Statement for the year 2018-19.

The central bank also retained the GDP growth projection for FY19 at 7.4 per cent.

For the first half of 2019-20, the GDP growth has been projected at 7.5 per cent.

RBI said inflation in the second half of the current fiscal is projected at 2.7-3.2 per cent.

While the decision on keeping the policy rate unchanged was unanimous, Ravindra H Dholakia voted to change the stance to neutral.

In view of the rise in digital transactions, RBI Monetary Policy Committee has decided on the implementation of an ombudsman for digital transactions, this will be notified by the end of January 2019.