Govt silent on repo status quo, welcomes accommodative stance

Finance Ministry.

New Delhi, ┬áThe Finance Ministry late on Thursday said that it welcomes the Reserve Bank’s accommodative stance towards further rates in the future, while remaining silent on the central bank’s decision to keep the repo rate unchanged.

Defying expectations, the RBI earlier in the day announced to keep the repo rate unchanged at 5.15 per cent after five consecutive rate cuts in its previous monetary policy announcements.

In a tweet, the Finance Ministry also said that it noted the downward revision of the GDP growth rate for financial year 2019-20 to 5 per cent by the central bank’s Monetary Policy Committee.

“We have noted the revision in the #GDP growth projection by #MPC from 6.1 percent to 5.0 percent in 2019-20. We welcome the unchanged accommodative stance of RBI towards future cuts in the repo rate,” it said in the tweet.

RBI Governor Shaktikanta Das, while addressing the media after the announcement, attributed the decision to keep the repo rate unchanged to the expection of high inflation in the near term.

A rate cut was highly anticipated given the slowdown in the economy and the growth rate for the July-September quarter falling to a six year low of 4.5 per cent.

Das said that the previous rate cuts by RBI and the the stimulus measures announced by the government should be given some time to reflect on the economy.