Mumbai, Feb 6 (PTI) Reserve Bank Governor Sanjay Malhotra on Friday said the key policy rates will remain at low levels for a long period and may go down even further.

The statement comes soon after the central bank decided to keep the repo rate unchanged at 5.25 per cent at its bi-monthly monetary policy, and kept the stance netural.

"The policy rates will continue to be at low levels for a long period of time (and) they will go down even further," Malhotra said in a post-monetary press conference.

He, however, added that the decision on rates will be taken by the Monetary Policy Committee (MPC).

Since February last year, the RBI has reduced the repo rate by 125 basis points.

The governor said policy transmission on the deposit side has been slower and interest rate on fixed deposits will be going down.

Replying to a question on the impact of recent trade deals signed by India, the governor said this, along with other factors, could add up to 20 basis points to the country's GDP growth.

Earlier, the RBI upwardly revised GDP forecast for the first and second quarters of the next fiscal year.

At the press conference, Deputy Governor T Rabi Sankar said the RBI will be able to manage government borrowing programme comfortably.

The government's gross borrowing has been pegged at Rs 17.2 lakh crore during the next fiscal year, while net borrowing was Rs 11.73 lakh crore.

Malhotra added that T-bills will help manage yield curve and the government would be able to raise net borrowing of Rs 11.73 lakh crore at a reasonable rate.

On the Budget announcement regarding data centres, he said it will bring in a lot of foreign investments.

To a question, Malhotra said currency in circulation has increased quite a lot in the last one year. PTI AA DP NKD TRB

Interest rates to remain low; policy decisions by committee; government borrowing manageable as T-bills support the yield curve. Interest rates will remain low and may fall further, with the Monetary Policy Committee making rate decisions; the repo rate was held at 5.25% after a 125 basis point reduction since last February, while deposit-rate transmission has been slow and fixed deposit rates are expected to decline. Treasury bills will be used to manage the yield curve and support the government borrowing programme, recent trade deals may add marginal GDP growth, budget measures for data centres are expected to draw foreign investment, and currency in circulation has increased significantly.