New Delhi, Feb 7 (KNN) Assessing the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) in its meeting today has reduced the repo rate by 25 basis points or 0.25 per cent to 6.25 per cent.

The central bank also changed its policy stance to "neutral" from existing "calibrated tightening".

The reverse repo rate now stands adjusted to 6 per cent, and the marginal standing facility (MSF) rate and the bank rate to 6.5 per cent, the RBI said in its sixth bi-monthly policy statement for 2018-19.

This is the first RBI policy statement under Governor Shaktikanta Das, who took charge in December last year.

RBI said “These decisions are 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.”

projected an economic growth rate of 7.4 per cent for the next fiscal, up from 7.2 per cent estimated for the current fiscal by Central Statistics Office (CSO). The gross domestic product (GDP) growth is likely to be influenced by growth in bank credit and overall financial flows to the commercial sectors, though slowing global demand could play a dampener, said an RBI document released after the three-day meeting of the central bank's Monetary Policy Committee (MPC).

The RBI had projected the GDP growth for 2018-19 in the December policy at 7.4 per cent (7.2-7.3 per cent in H2) and at 7.5 per cent for H1:2019-20, with risks somewhat to the downside.

The CSO has estimated GDP growth at 7.2 per cent for 2018-19.

"Looking beyond the current year, the growth outlook is likely to be influenced by... aggregate bank credit; and overall financial flows to the commercial sector continue to be strong, but are yet to be broad-based," the MPC said.

"In particular, trade tensions and associated uncertainties appear to be moderating global growth," it said. (KNN Bureau)