The Reserve Bank of India (RBI) on Thursday kept the repo rate unchanged at the current 5.15 per cent level in a bid to contain rising inflation.
The six-member monetary policy committee (MPC) headed by Governor Shaktikanta Das announced the decision after a three-day meeting, the last of current fiscal year 2019-20. Repo rate is the rate at which the RBI lends money to commercial banks. A repo rate cut allows banks to reduce interest rates for consumers and lowers equal monthly instalments on home loans, car loans and personal loans.
The RBI has slashed interest rates by a cumulative 135 basis points this fiscal, making it the world's most aggressively easing major central bank.
The government expects economic growth at 5 per cent for the current financial year, far slower than the 2018-19 expansion rate of 6.8 per cent.
This is mainly due to weak household spending, muted corporate investments, and a crippling slowdown in manufacturing and construction activity.