RBI Monetary Policy : No change in interest rates, SLR cut by 0.5%; GDP projection lowered to 7.3%
New Delhi: The Reserve Bank of India (RBI) on Wednesday decided not to change key interest rates in its second bi-monthly monetary policy review.
RBI Governor Urjit Patel- led Monetary Policy Committee (MPC) kept the repo rate unchanged at 6.25 percent.
Consequently, the Reverse Repo Rate stands at 6 percent while the CRR remains at 4 percent. However, the MPC has decided to cut the Statutory Liquidity Ratio (SLR) by 50 basis points to 20 percent.
Key Highlights RBI bi-monthly monetary policy review
- MPC declined meeting with Finance Minister Arun Jaitley: RBI Guv Urjit Patel
- New data released by CSO needs to be analysed, says Patel
- 5 MPC members voted for status-quo on rates, 1 member not in favour
- MPC member Dr. Ravindra H Dholakia against interest rate pause decision
- Policy decision consistent with neutral stance, says RBI
- SLR cut to be effective from fortnight starting June 24
-MSF rate unchanged at 6.5 percent
- HTM requirement for banks left unchanged
-RBI projects inflation in 2-3.5 percent range for first half of 2017-18 and 3.5-4.5 percent for second half
- Market edges higher post RBI policy decision
- Implementation of GST not expected to have material impact on overall inflation
- FY18 GDP forecast revised down to 7.3 percent from 7.4 percent
- At the current juncture, global political and financial risks materialising into imported inflation and the disbursement of allowances under the 7th central pay commission’s award are upside risks
- RBI cautions against rush of farm loan waivers, warns of risk on fiscal slippages and inflationary spillovers
- Next meeting of the MPC is scheduled on August1 and 2, 2017
- Continuing remonetisation should enable a pick-up in discretionary consumer spending, especially in cash-intensive segments of the economy: RBI
- Industrial outlook survey and the PMIs for manufacturing and services indicate that pricing power remains weak, says RBI
- The current state of the economy underscores the need to revive private investment, restore banking sector health and remove infrastructural bottlenecks: RBI