The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Thursday (February 6) announced its sixth and last monetary policy for the current financial year, i.e. FY19-20.

The MPC resolution of the RBI was placed on the website at 11.45 AM on February 6, 2020. The central bank decided to keep the benchmark lending rates or the repo rates unchanged at 5.15%. The reverse repo rate remains unchanged at 4.90%

A statement issued by the bank said, ''RBI will continue with its accommodative stance as long as it takes.'' It further stated that the economy continues to be weak and the output gap remains negative as it announced its Monetary Policy Statement on Thursday.

The GDP growth rate has been estimated to be 5.5-6.1% for HY20. However, the economy still remains at risk, informed the RBI. The Economic Survey 2019-20 had projected the Indian economy to grow at around 6-6.5% in the next financial year beginning April 2020.

Meanwhile, the Consumer Price Index (CPI) retail inflation was increased to 6.5% for January - March. Earlier, it was reported that the committee was tasked by the government to tame retail inflation based on CPI at 4%.

The retail inflation that for several months remained in the comfort zone of the central bank has started inching up and crossed the 7% mark during December 2019. In December, retail inflation peaked to a five-year high of 7.3, mainly due to costlier vegetables, specifically onion and tomato.

In its previous monetary policy review in December, the RBI had decided for a status quo, leaving the key repo -- the rate at which it lends to banks -- at 5.15%

Monetary policy is the macroeconomic policy laid down by the RBI, which constitutes the management of money supply and interest rates.

The RBI committee, which is led by Governor Shaktikanta Das, announces its decision on a bi-monthly basis.

The central bank tweaks interest rates to achieve macroeconomic objectives such as liquidity, consumption, and inflation.