RBI keeps repo rates unchanged

Gayathri Udyawar
/ Categories: Trending, Markets

The Reserve Bank of India has kept key rates unchanged in its sixth bi-monthly monetary policy review. MPC, however, cautioned against rising inflationary pressures.

 

RBI's Monetary Policy Committee (MPC) has decided to keep the policy repo rate under LAF unchanged at 6.0 per cent and consequently, the reverse repo rate under the LAF is at 5.75 per cent, while the MSF rate remains at 6.25 per cent.

 

The central bank projected the real gross value added (GVA) growth for 2017-18 at 6.6 per cent, while for 2018-19 it is projected at 7.2 per cent overall. RBI detailed that the range or GVA growth will be 7.3 to 7.4 per cent in H1 and 7.1 to 7.2 per cent in H2, with risks evenly balanced.

 

MPC has given a neutral stance of monetary policy and RBI has called for a need for vigilance around the developing inflation scenario. It mentioned that the global macroeconomic situation is becoming less conducive to the Indian Markets.

 

RBI has raised March-end CPI inflation forecast to 5.1 per cent and projected an inflation range of 5.1 to 5.6 per cent in the first half of the next fiscal year. The central banker notes that increase in housing rent allowance by the state government, rising crude oil and commodity prices and hike in minimum support prices (MSPs) for kharif crops are expected to increase inflationary pressures.

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