Monetary Policy: RBI leaves key rates unchanged

   Monetary Policy: RBI leaves key rates                             unchanged

 FEB 2:  

As was widely expected, Reserve Bank of India Governor Raghuram Rajan on Tuesday chose to keep the policy repo rate unchanged on inflation concerns even as it emphasised that it continues to be accommodative.

The policy repo rate (the interest rate at which the RBI provides liquidity to banks to tide over short-term liquidity mismatches) is currently at 6.75 per cent.

While inflation has evolved closely along the trajectory set by the monetary policy stance and the January 2016 target of 6 per cent should be met, the RBI said going forward, under the assumption of a normal monsoon and the current level of international crude oil prices and exchange rates, inflation is expected to be inertial and be around 5 per cent by the end of fiscal 2016-17.

Fast facts

Repo rate unchanged at 6.75%

CRR unchanged at 4%

Bank Rate, MSF rate unchanged at 7.75%

Forecasts growth to strenghten gradually in FY17...GVA growth rate at 7.6%

RBI says January target of 6% CPI inflation "should be met"

Forecast inflation rate around 5% by end of FY17

Keeps GVA growth rate of 7.4% in FY16 with downward bias

Budget will create more room for RBI in terms of monetary policy