New Delhi, Jun 6 (HT): The Reserve Bank of India’s monetary policy committee concluded its three-day meet on Wednesday with a decision to increase its benchmark interest rate by 25 basis points.

The RBI’s six-member committee voted to hike the central bank’s repo rate, or the rate at it which lends to banks, by 25 basis points, to 6.25% from 6% earlier in its second bimonthly monetary policy review of FY18. The reverse repo rate has also been raised by 25 basis points to 6%.

Led by RBI governor Urjit Patel, the MPC maintained its neutral stance on monetary policy, keeping with its objective of achieving 4% (+/-2%) retail inflation in the medium term as it saw growth pick up pace, and the need to support the rupee , it said in its June policy statement.

The central bank had decided to hold the repo rate at 6% in its April policy meet.

In a survey of 41 economists by Bloomberg, 27 had predicted that the MPC will keep rates on hold in the June meeting. The RBI MPC has voted to keep interest rate at 6% for the fifth consecutive time since August last year.

This is the first time that the Reserve Bank of India has hiked the repurchase rate since January 2014.