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Reserve Bank of India cuts growth forecast to 6.7%

RBI keeps key repo rate steady but pumps in liquidity

Inflation has been pushed up by rising food prices: A man buys lemons at a market in Ahmedabad, India.   © Reuters

MUMBAI -- The Reserve Bank of India on Wednesday slashed its forecast for real economic growth to 6.7% this fiscal year ending March, from its prediction of 7.3% in August. RBI uses gross value added growth as a measure of economic growth instead of usual gross domestic product.

Its monetary policy committee voted to keep the key interest rate unchanged at 6% earlier in the day. Although RBI shrugged off the government's call for a cut to boost the sluggish economy, it surprised markets by taking steps to release liquidity into the financial system.

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