RBI Kept Repo Rate unchanged at 6% and reverse Repo Rate at 5.75%

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During a press conference on Wednesday at RBI, Mumbai, the RBI Governor Urjit Patel confirmed that there will no change in the Repo Rate and Reverse Repo Rate.

This is the third time consecutively when the Monetary Policy Committee of RBI decided to keep the Repo Rate and Reverse Repo Rate unchanged at 6% & 5.75% under LAF respectively. Apart, MSF Rate & the Bank rate would be 6.25%.

This is a sixth bi-monthly policy statement by RBI MPC for 2017-18.

The monetary policy decision was the ratio of 5:1 in favor of changing the Repo rate where the 5 members of the committee were in favor of not changing the Repo Rate and 1 voted towards changing the rate by 25 points.

According to RBI MPC, there is a high risk of inflation, which leads to the monetary conditions tight. Apart, there is a possibility of improvement in the export growth, which will improve the global demand.

Key Highlights:

Retail inflation estimated at 5.1 pc in Q4 this fiscal and 5.1-5.6 pc in H1 of FY 2018-19;

Inflation likely to ease to 4.5-4.6 percent in H2 of FY 19

Oil prices may vary depends on the production

In a statement, RBI Governor added that a task force will be formed to implement the recommendations of the two high level inter agency committees who will review the entire management of the currency.

SBI Chairman along with many economists said the monetary policy announced by RBI is quite balanced and expected.

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