Breaking News: RBI keeps repo rate unchanged at 6.25%

The Reserve Bank of India (RBI) maintained status quo and kept the repo rate at 6.25%, as it shifted its stance from accommodative to neutral.

RBI Governor Urjit Patel kept the Cash Reserve Ratio (CRR) unchanged at 4% and hiked the Reverse Repo Rate to 5.75% to 6%. It cut the MSF rate to 6.5%. The RBI will handle liquidity through OMO, MSS

Consumer prices rose an annual 3.65% in February, and climbed just 3.17% the previous month - the slowest pace since the government launched the current index series in January 2012.

As per the six-member Monetary Policy Committee (MPC), their main concern is inflation could accelerate and threaten RBI’s medium-term target of 4%.

"It is important to note three significant upside risks that impart some uncertainty to the baseline inflation path -- the hardening profile of international crude prices; volatility in the exchange rate on account of global financial market developments, which could impart upside pressures to domestic inflation; and the fuller effects of the house rent allowances under the 7th Central Pay Commission,” the RBI stated.

In last monetary policy review too, the RBI had kept repo rate unchanged.