RBI keeps repo rate unchanged at 6.25 per cent

The MPC will be meeting in the backdrop of India's economic growth slowing to 7.1 per cent in 2016-17. "We continue to expect the RBI to be on a prolonged pause but with risks of a 25bp rate cut in August if certain conditions are met".

"The RBI and the Monetary Policy Committee are being cautious in not recognising the significant decline in inflation".

"If the configurations evident in April are sustained, then absent policy interventions, headline inflation is projected in the range of 2.0-3.5 per cent in the first half of the year and 3.5-4.5 per cent in the second half", RBI said.

This is the fourth consecutive policy review in which the apex bank has maintained status quo on its repo, or short-term lending rate, since it reduced it by 25 basis points to 6.25 per cent in October 2016.


At the same time, the RBI cut banks' statutory liquidity ratio - the amount of bonds they must set aside - by 50 basis points to 20 percent of total deposits starting on June 24.

"Given the inflation trajectory and as the liquidity is enough in the market, it is unlikely that there would be any rate cut this time".

According to the Kotak Mahindra Bank's Upasna Bhardwaj, the RBI's announcement may acknowledge the softer increase and low inflation and since "the overall tone of the method could be weaker than usual".

"We don't expect any change in the official neutral stance in June but we do expect RBI to tone down its hawkishness compared to the April and February policy statements", said Siddhartha Sanyal, chief India economist at Barclays.


The Reserve Bank of India (RBI) on Wednesday kept the policy rate unchanged at 6.25 per cent, but raised concerns over fiscal slippages in view of rush for farm loan waivers.

Meanwhile, retail inflation in the country during April decelerated to 2.99 per cent, from 3.89 per cent for March as food prices reported a massive plunge.

The BSE benchmark Sensex slipped into negative territory for a brief period after the RBI kept key policy rates unchanged today, but re-entered the green zone towards the fag-end of the session.

The bank's statement said that it did not anticipate a major impact from the rollout of the Goods and Services Tax on July 1.


The slowdown was largely attributable to the government's shock decision last November to remove large denomination banknotes from circulation in a bid to combat rampant tax avoidance.


Popular
  • CBSE Class 10 Result 2017 coming soon at cbseresults.nic.in, Bing

    CBSE Class 10 Result 2017 coming soon at cbseresults.nic.in, Bing

    You can easily take a print out of that for a temporary use at colleges until you get a hard Mark sheet from your school. In Ajmer region, candidates of class X who registered were 1,02,343 among which 61,058 were boys and 41,285 were girls.

    Rafael Nadal notches emphatic first round victory at the French Open

    Former French Open runners-up Sam Stosur and Sara Errani, the latter coming through qualifying, also moved into round two. Rising German star Alexander Zverev, seeded ninth, begins his campaign against veteran Spaniard Fernando Verdasco later.
    GSEB SSC result 2017 out today at 8 am on www

    GSEB SSC result 2017 out today at 8 am on www

    The GSEB board was established in the year 1979, and it is giving the priceless services to the education department of the state. In 2016, almost 7,91,672 students appeared for Gujarat SSC Exam, out of which 5,27,113 students were able to qualify the exam.
  • A guide to global warming, Paris pact and the US role

    Yes, it's possible to remain in the agreement and just fail to meet any of its terms. "Climate change is a global challenge". MAKE AMERICA GREAT AGAIN!" the United States president said in a tweet , punctuating the post with his campaign slogan.
    Venus Williams opens play at French Open on Day 4

    Venus Williams opens play at French Open on Day 4

    Past year at the French Open, Serena Williams advanced to the final, losing to Garbine Muguruza. Williams is playing at Roland Garros for the 20th time, a record in the Open era.
    India to probe $10.8bn plane order

    India to probe $10.8bn plane order

    But the government finally made a decision to buy 68 for Air India from Boeing , and another 43 for Indian Airlines from Airbus. CBI said that the acquisition allegedly caused a financial loss to the "already stressed" national carrier.
  • All you need to know about Judy Malware

    All you need to know about Judy Malware

    Some are free and some offer yearly subscription rates that sometimes include protection for multiple devices. The malware used infected devices to generate fraudulent clicks on advertisements for generating revenues.
    Young drivers finish strong in star-studded Indy 500 field

    Young drivers finish strong in star-studded Indy 500 field

    Although Fernando Alonso didn't win the Indianapolis 500 on Sunday, he most likely won himself some new fans stateside. What's more, Alonso's effort brought its own sense of satisfaction, to say nothing of a mark to improve upon.
    LeBron struggles, exchanges words with fan after Game 3 loss

    LeBron struggles, exchanges words with fan after Game 3 loss

    Still, they beat the Cavaliers in Cleveland the next game before falling easily in Games 4 and 5. Thomas is set to play the last of his four-year, $27 million contract next season.
  • Trump's use of private cellphone raises secu... 10:51 pm Tue

    Trump's use of private cellphone raises secu... 10:51 pm Tue

    In the diplomatic arena, a world leader communicating with other leaders via unsecured mobile phones is a breach of protocol . The president also made the offer to Mexico , but officials there did not take him up on it.
    Suspect in mass shooting confesses

    Suspect in mass shooting confesses

    Be proactive - Use the "Flag as Inappropriate" link at the upper right corner of each comment to let us know of abusive posts. Mississippi Bureau of Investigation spokesman Warren Strain says those charges could change as the investigation continues.
    Kathy Griffin Poses With Donald Trump's Bloody, Decapitated Head

    Kathy Griffin Poses With Donald Trump's Bloody, Decapitated Head

    Imagine a conservative did this to Obama as POTUS?" D-list comic Kathy Griffin is transitioning to ISIS-inspired prop comedy. President Trump did not respond but his eldest son, Donald Trump Jr , did, tweeting: "Disgusting but not surprising.

CONNECT