Highlights of the RBI's sixth bi-monthly monetary policy announced today

Following are the highlights of the sixth bi-monthly monetary policy announced by RBI:

* Policy repo rate unchanged at 6.25 percent.

* Economic growth for FY17 lowered to 6.9 percent; RBI pegs it at 7.4 percent in 2017-18.

* Growth is expected to recover sharply in 2017-18.

* Retail inflation in Q4 likely to be below 5 percent.

* Inflation projected in the range of 4-4.5 percent in the first half of 2017-18 and 4.5-5 percent in the second half.

* Upside risks to inflation - rise in crude oil prices, volatility in exchange rate, and fuller effect of the 7th Pay Panel.

* Global growth projected to pick up modestly in 2017.

* Global trade remains subdued due to increasing tendency towards protectionist policies.

* RBI changes policy stance from ‘accommodative’ to ’neutral’.

* Monetary Policy Committee (MPC) shifts policy stance to neutral keeping in mind transitory effect of demonetisation.

* Surplus liquidity to fall with progressive remonetisation; abundant liquidity with banks may persist in early 2017-18.

* High frequency indicators point to subdued activity in services sector, automobile sales, domestic air cargo, railway freight traffic, and cement production.

* Steel consumption, port traffic, international air freight, foreign tourist arrivals weathered effect of demonetisation.

* Excluding food and fuel, inflation has been unyielding at 4.9 percent since September.

* Makes case for faster resolution of NPAs and hastening recapitalisation of banks for lower lending rates.

* The next meeting of the Monetary Policy Committee on April 5-6.