Mumbai, Aug 6 (PTI) Reserve Bank Governor Sanjay Malhotra said continuing global uncertainties, frontloading of interest rate cuts, and uptick in core inflation prompted the central bank to opt for the status quo at the bi-monthly policy review on Wednesday.

Speaking to reporters at the central bank headquarters here after announcing the policy review, Malhotra affirmed the Reserve Bank of India's (RBI's) commitment to support growth, and added that the GDP expansion at 6.5 per cent is slower than what is aspired for.

The six-member monetary policy committee (MPC) will continue to be vigilant and continue watching all the incoming data to take an appropriate call on rates, Malhotra said, even as a growing number of analysts opine that the possibilities of a cut in rates are slimming down.

Listing out the reasons for the unanimous call of holding rates, Malhotra said, "We did a front-loaded rate cut of 1 percentage point over a short period of four months from February to June. Transmission is still happening." Pointing to tariff negotiations and the clouded geopolitical aspects, he said the global uncertainties on this issue continue, he said.

Additionally, the rising core inflation also played a part in the policy decision which dashes borrowers' hopes of a decline in their outgoes.

Without directly spelling out his views on credit growth not accelerating as much despite the rate cuts, Malhotra said some part of transmission is yet to happen, and added that if the rates go down, it will lead to increase in credit pickup and so will the overall growth momentum.

On growth in home loans, the mainstay of retail lending, Malhotra said the RBI feels growth in the segment will be "very good" at 14 per cent as it is outpacing the system.

He added that it takes longer for lenders' rate offerings to reflect all the cuts done by the RBI and then for homebuyers to make their decisions on long-term purchases, hinting that credit to the sector will grow more.

He said the sharp decrease to 2.1 per cent in the headline number for June is more because of the cooling of food inflation.

He maintained that both headline and food inflation numbers are important and the RBI continues to watch that.

A rate cut would have aided GDP expansion, and Malhotra affirmed the RBI's commitment to do whatever is required.

"We will continue to do whatever is required in such a scenario. Of course, trade negotiations are still continuing. We are hopeful that we will have an amicable solution," he said.

"We will not be found wanting in whatever is required to provide the right balance of price stability and economic growth for the development of our country," the career bureaucrat-turned-central banker added.

On the issue of depreciation of rupee, which has dipped to a lifetime low, Malhotra said in times of current uncertainties, such outcomes should not be a surprise.

With regards to the bad loan situation, he said the NPA situation in the banking system is satisfactory with gross NPA at 2.2 per cent while net NPA is at 0.5-0.6 per cent. PTI AA TRB

Monetary policy pause signals vigilance amid global uncertainty and a core inflation uptick, awaiting fuller rate transmission. Reserve Bank maintained the policy rate at the bi monthly review due to global uncertainties, prior front loaded rate cuts, and a rise in core inflation, with the monetary policy committee remaining vigilant. The Governor noted incomplete transmission of earlier easing, expected credit pickup-notably in home loans-as transmission advances, and continued monitoring of headline and core inflation. The statement also remarked on rupee depreciation amid uncertainty and described banking sector asset quality as satisfactory.