Full text: RBI keeps rates unchanged, cuts inflation projection

RBI keep the policy repo rate unchanged at 6.25%

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ECONOMY NEWS| The Reserve Bank of India on Wednesday kept its policy repo rate unchanged at 6.25 percent, as widely expected, while lowering its projections for inflation after recent data showed consumer prices rising more slowly. RBI last changed the policy rate with a 25 basis points cut in October.

Here is the full text of the RBI policy

Second Bi-monthly Monetary Policy Statement, 2017-18 Resolution of the Monetary Policy Committee (MPC), Reserve Bank of India.

On the basis of an assessment of the current and evolving macroeconomic situation at its meeting on Wednesday, the Monetary Policy Committee (MPC) decided to:

1.  keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25 per cent.

Consequently, the reverse repo rate under the LAF remains at 6.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.50 per cent.

The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth. 

Assessment

2.  Since the April 2017 meeting of the MPC, globa economic activity has expanded at a modest pace, supported by firming growth in major advanced economies (AEs) and in some emerging market economies (EMEs) as well. In the US, a tightening labour market is generating wage gains. Alongside, industrial production has steadily improved in recent months and retail sales remain robust, although home sales ebbed in April. Political risks remain high, however. In the Euro area, the recovery has been underpinned by consistently falling unemployment, rising retail sales and a brighter outlook for manufacturing reflected in purchasing managers’ and business surveys. In Japan, exports supported by a depreciated yen and industrial activity are driving an acceleration in growth.  | READ MORE

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