Sunday 21st, January 2018
canara news

RBI retains policy at 6.25%; ups reverse repo, cuts MSF by 25 bps

Published On : 06 Apr 2017

Mumbai, (PTI) The Reserve Bank left its benchmark lending rate unchanged at 6.25 per cent on Thursday for the third policy review in a row citing upside risk to inflation.

It however increased the reverse repo rate at which it pays to lenders by 0.25 per cent to 6 per cent, narrowing the policy rate corridor.

Given the upside risks to inflation and excess liquidity in the system, the repo rate has been retained at 6.25 per cent but the reverse repo has been revised upwards. The Marginal Standing Facility has been revised downwards (rpt) downwards by 0.25 per cent to 6.5 per cent, the central bank said in the first bi-monthly monetary policy review of 2017-18.

The central bank said the policy decisions are unanimous.

On the basis of gross value add, RBI sees the economy accelerating to 7.4 per cent in the current fiscal, up from 6.7 per cent in 2016-17.

However, the monetary authority said it is worried on three fronts on the inflation and the general economy. The first stems from a possible el nino impact on the monsoon. The second worry arises from the GST implementation and the third upside risks to inflation comes from the seventh pay commission award, according to the Monetary Policy Committee.

"For 2017-18, inflation is projected to average 4.5 per cent in the first half and 5 per cent in the second half," the RBI said.

"The main one stems from the uncertainty surrounding the outcome of the south west monsoon in view of the rising probability of an El Ni o event around July-August, and its implications for food inflation," it said.

More News

TRAI recommends in-flight mobile calls, Internet services
TRAI recommends in-flight mobile calls, Internet services
Nifty snaps 3-day rally, slips 41 pts to 10,700
Nifty snaps 3-day rally, slips 41 pts to 10,700
Aadhaar biometric lock, a lesser-known security feature
Aadhaar biometric lock, a lesser-known security feature

Write your Comments

Disclaimer: Please write your correct name and email address. Kindly do not post any personal, abusive, defamatory, infringing, obscene, indecent, discriminatory or unlawful or similar comments. will not be responsible for any defamatory message posted under this article.

Please note that under 66A of the IT Act, sending offensive or menacing messages through electronic communication service and sending false messages to cheat, mislead or deceive people or to cause annoyance to them is punishable. It is obligatory on CANARANEWS to provide the IP address and other details of senders of such comments, to the authority concerned upon request.

Hence, sending offensive comments using canaranews will be purely at your own risk, and in no way will be held responsible.