RBI keeps key rates unchanged in fifth bi-monthly monetary policy review
The Reserve bank of India (RBI) in its fifth bi-monthly monetary policy review for year 2016-17 has kept key rates unchanged.
Decision in this regard was taken by RBI’s six-member Monetary Policy Committee (MPC) headed by Governor Urjit Patel. This decision was taken on the basis of an assessment of the current and evolving macroeconomic situation.
- Repo rate under the liquidity adjustment facility (LAF): Unchanged at 6.25 percent.
- Reverse repo rate under the LAF: Unchanged at 5.75 per cent.
- Marginal standing facility (MSF) and Bank Rate: Unchanged at 6.75 per cent.
- Reserve Ratios Cash Reserve Ratio (CRR) of scheduled banks: Unchanged at 4.0 per cent of net demand and time liability (NDTL).
- Statutory Liquidity Ratio (SLR): Unchanged 20.75 per cent.
The policy repo rate where kept unchanged citing global and domestic uncertainties that posed upside risks to inflation. The MPC also has cut Gross Value Added (GVA) growth estimates for the economy in the fiscal year ending March 2017 to 7.1% from 7.6% earlier.
Thus, RBI has retained its “accommodative” monetary policy stance with the objective of achieving consumer price index (CPI) inflation at 5% by Q4 of 2016-17 and the medium-term target of 4% within a band of +/- 2 per cent, while supporting growth.