RBI hikes repo rate by 25 bps to 6.25%; other highlights of the monetary policy announcement

Mumbai: The following are the highlights of the second bi-monthly monetary statement for 2018-19: * RBI hikes key lending rate (repo) by 0.25 percent to 6.25 percent * Rate hike is the first in four-and-half-years * Reverse repo rate stands at 6 percent, bank rate at 6.50 percent [caption id=“attachment_4495283” align=“alignleft” width=“380”] Representational image. Reuters[/caption] * Growth projection retained at 7.4 percent for 2018-19 * Projects retail inflation at 4.8-4.9 percent for April-September, 4.7 percent in H2 * Major upside risk to the inflation path as price of crude rose by 12 percent * Volatile crude oil prices adds to uncertainty to the inflation outlook * Investments recovering well; to get boost from swift resolution under IBC * Geo-political risks, financial market volatility, trade protectionism to impact domestic growth * Adherence to budgetary targets by the Centre and states will ease upside risks to the inflation outlook * All members of the monetary policy committee voted for 0.25% rate hike * Next meeting of the MPC on 31 July and 1 August.