Important Points to Know About Fifth Bi-monthly Monetary Policy Statement, 2016-17 Resolution of the Monetary Policy Committee (MPC), Reserve Bank of India:
The Reserve Bank of India on Dec 07, 2016 kept the base rate unchanged at 6.25 per cent. This was announced at its bi-monthly monetary policy review.
The decision of the MPC is consistent with the accomodative stance of the policy in consonance with the objective of achieving 5% CPI inflation by Q4 of FY17. The RBI has lowered the GVA growth projection for 2016-17 to 7.1 per cent from 7.6 per cent. It said it was withdrawing incremental CRR with effect from December 10. It said the outlook for GVA growth for 2016- 17 has turned uncertain after the unexpected loss of momentum by 50 basis points in Q2 and the effects of the withdrawal of Specified Bank Notes (SBNs) which are still playing out.
On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to:
· keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25 per cent.
Consequently, the reverse repo rate under the LAF remains unchanged at 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent.
The decision of the MPC is consistent with an accommodative stance of monetary policy in consonance with the objective of achieving consumer price index (CPI) inflation at 5 per cent by Q4 of 2016-17 and the medium-term target of 4 per cent within a band of +/- 2 per cent, while supporting growth. The main considerations underlying the decision are set out in the statement below.
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RBI Rates and Ratios
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Policy Repo Rate
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Reverse Repo Rate
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Marginal Standing Facility Rate
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