Third Bi-monthly monetary policy released by RBI

Third Bi-monthly monetary policy released by RBI
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The Third Bi-monthly Monetary Policy Statement 2017-18 was released by The Reserve Bank of India (RBI) on 2 August 2017. The Monetary Policy Committee (MPC) has decided to decrease the policy Repo Rate under the Liquidity Adjustment Facility (LAF) by 25 basis points to 6.0%. As a result, the Reverse Repo Rate is now at 5.75 percent. This has been the first cut in the rate since October 2016.

Highlights of 3rd Bi-monthly Monetary Policy:

  • Retail prices increased to 1.5 percent in June, which is lower than April-September inflation forecast of RBI, which was from 2 to 3.5 percent.
  • The retail inflation, which was being led by softer food prices, fell to a more than five-year low in June 2017.
  • Due to the falling of food prices and the base effect inflation had slowed down.
  • The economic growth was forecasted at 7.3 percent with prospects of a better harvest. But the industrial sector continues to face hardships.
  • The decision taken by MPC is consistent with the aim of obtaining the medium-term target for Consumer Price Index (CPI) inflation of 4 percent within a band of 2 percent, also while supporting growth.

 

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