The Reserve Bank of India’s (RBI’s) monetary policy committee (MPC) voted unanimously to hike the repo rate by 25 basis points and to keep its policy stance neutral, leaving the room open for further rate hikes.
Repo rate was hiked by 25 basis points to 6.25 percent while reverse repo has been revised to 6 percent.
Some Key Takeaways From RBI MPC POLICY:
- The Reserve Bank of India hikes key lending rate or repo rate by 25bps to 6.25%.
- Reverse repo rate now stands at 6%; FY19 growth projection retained at 7.4 %.
- The central bank projects retail inflation at 4.8-4.9% for April-September, 4.7% in H2 FY18.
- It sees major upside risk to the inflation path as crude prices rose 12%.
- Says volatile crude oil prices adds uncertainty to its inflation outlook.
- RBI expects boost to investments from swift resolution under the Insolvency & Bankruptcy Code.
- Geo-political risks, financial market volatility, trade protectionism to impact domestic growth.
- Adherence to budgetary targets by the Centre and states will ease upside risks to the inflation outlook.
- All members of the monetary policy committee voted for a 0.25% rate hike.
- Next meeting of the Monetary Policy Committee on July 31 and August 1.
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