RBI keeps rates unchanged; highlights from today's policy statement
Cuts growth forecast to 7.1 percent, from 7.6 percent for this fiscal
The Reserve Bank of India (RBI) at its fifth bi-monthly monetary policy statement, 2016-17, today surprised many by maintaining status quo on the policy rate front and kept the key repo rate unchanged at 6.25 percent.
Most of the economists had anticipated a 25 basis point cut in the policy rate because of softening inflation and weakening growth prospects, especially, in the wake of demonetisation exercise that had already started putting the brakes on the country's consumption-driven economy.
Here are the other major highlights from the RBI's policy statement
1) Cash reserve ratio or CRR unchanged at 4 percent
2) Cuts growth forecast to 7.1 percent, from 7.6 percent for this fiscal
3) Inflation target remains 5 percent for March 2017, upside risk
4) Demonetisation to lower prices of perishables, could reduce inflation by 10-15 basis points by December
5) All MPC members voted in favour of status quo in policy
6) Demonetisation to result in short-run disruptions in cash-intensive sectors
7) Crude price volatility, surge in financial market turbulence could put March end inflation target at risk
8) Foreign exchange reserve rose to all-time high of $364 billion on 2 December
9) RBI injected Rs 1.1 lakh crore liquidity through OMO purchases this fiscal
10) Next monetary policy on 8 February.
With PTI inputs
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DHFL was the first finance company to be referred to NCLT by the RBI using special powers under Section 227 of the IBC. The company owes Rs 87,031 crore to financial creditors
Apart from these days, several banks might remain closed mid-March as many unions have called for a nationwide strike against the government's plan for making the banking sector private. The two-day-long strike is on 15 and 16 March.
The board, in its meeting, reviewed various areas of operations of the RBI, including ways to strengthen grievance redressal mechanisms in banks