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In it's Fifth Bi-Monthly Policy Review today, the 6 member Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) today kept the Repo Rate, the rate at which banks borrow from RBI, unchanged at 6% for the second time in a row. This move came after retail inflation in October rose to a 7-month high of 3.58%. The RBI last cut the rate by 25 basis points in August.
Five of six MPC members (Dr. Chetan Ghate, Dr. Pami Dua, Dr. Michael Debabrata Patra, Dr. Viral V. Acharya and Dr. Urjit R. Patel) voted in favour of a Status Quo (keeping the rates as they are). MPC member Ravindra H. Dholakia had voted for a policy rate reduction of 25 basis points. The policy rate still stands at a seven-year low. The committee had last cut the key lending rate by 25 basis points in August this year.
The inflation forecast for the next two quarters has been increased from 4.2 - 4.6 per cent to 4.3- 4.7 per cent on rising crude oil and vegetable prices. However, RBI said that headline inflation has gone along the projections.The GVA (Gross Value Added) forecast for FY18 was also kept unchanged at 6.7 per cent.
In order to give a further fillip to digital payments, RBI has decided to rationalise charges on debit card transactions.
Note : The ReverseRrepo Rate remains at 5.75 percent, and the Marginal Standing Facility (MSF) rate and the Bank Rate at 6.25 percent.
The next meeting of the the 6 member Monetary Policy Committee (MPC) is scheduled on 6 and 7 February, 2018.
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