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.