Banking Awareness General Knowledge

Second bi-monthly monetary policy for 2017-18 highlights

The second bi-monthly monetary policy announcement of the fiscal from the Reserve Bank of India saw a status quo as far as the key policy rate is concerned. 

The following are the highlights of the second bi-monthly monetary policy for 2017-18 as announced by the RBI:

* Repo rate unchanged at 6.25%,

* Reverse repo unchanged at 6%

* Statutory Liquidity Ratio cut by 0.5% to 20%

* Growth forecast for 2017—18 lowered to 7.3% from 7.4%

* Inflation projected at 2—3.5% for H1, 3.5—4.5% H2, FY18

* GST roll out not to have material impact on inflation

* Farm loan waivers risk fiscal slippages and inflationary spillovers

* 7th Pay Commission allowances, geo political, financial risk pose upside risk to inflation

* Need to revive private investment, restore banking sector health, remove infrastructure bottleneck

* RBI to work with government to address stress in bank balance sheet

* Five MPC members vote in favour of status quo on monetary policy, one had different views

* Next meeting of Monetary Policy Committee on August 1 and 2.