The Reserve Bank of India on Wednesday kept the repo rate of 6.25% unchanged during the release of its second bi-monthly monetary policy.

Addressing a press conference, the apex bank’s governor, Urjit Patel, said the Monetary Policy Committee wanted to keep the rate on hold until further clarity that is expected to “emerge with coming data”. The repo rate helps control inflation. Patel said the low inflation rate in April was a factor in the bank cutting its forecast.

The RBI governor said that recent GDP data showed that the economy had started slowing even before the Centre demonetised Rs 500 and Rs 1,000 notes last November. “GDP slowdown is more due to fundamental factors,” Patel said. “Inflation has been low since November 2016 due to transitory factors. New data released by CSO needs to be analysed carefully before reaching conclusions with certitude,” he added. He also said that farm loan waiver “is a path that needs to be tread carefully”.

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The bank issued a statement, in which it said the Goods and Services Tax would not have a major impact on the economy.

Patel said the statutory liquidity ratio was reduced by 50 basis points to 20% with effect from the fortnight starting on June 24.

The Public Sector Bank index rose by a percent after the announcement of the policy. Oriental Bank of Commerce, PNB, Bank of Baroda, Bank of India, Union Bank, Canara Bank and SBI rallied 1%-3%.

Patel said the committee had voted 5:1 on the policy rate. The panel, led by Patel, had started its interest rate review on Tuesday amid the Centre’s lobbying for a cut in borrowing costs, to help push private investments. Several analysts told PTI that the apex bank would consider changing the rates only after the rollout of the Goods and Services Tax regime on July 1.

On Monday, Finance Minister Arun Jaitley had suggested a reduction in interest rates while citing a stable inflation rate, normal monsoon forecast and an indication of stable oil prices, said PTI. “Growth and investment need to improve,” Jaitley had said. “These are indicators, which are available. Any finance minister under these circumstances would like a rate cut, the private sector would like a rate cut.”