RBI raised inflation forecast lowered growth forecast to 6.7 percent

RBI lowered its growth forecast to 6.7% and and raised its inflation forecast. Reserve Bank of India (RBI) left its key policy rate unchanged to a near seven year low 6 percent. Due to which the chance of rate cuts in the near term are unlikely. Home and auto loan rates too are unlikely to change. RBI citied higher risks to inflation as the reason for not changing policy rate.

On Wednesday, the six-member monetary policy committee left the repurchase (repo) rate – the rate at which RBI lends money to banks against bonds – unchanged at 6%.

The economic growth of India decelerated to lowest in three years i.e 5.7 percent. The impact of invalidation of notes in November is still hunting India’s economic growth. Other factor which contributed to the slowdown of economy growth was GST implementation.