8 Jun 2017

Highlights of RBI’s Second Bi - Monthly Monetary Policy for 2017-18

Highlights of RBI’s Second Bi - Monthly Monetary Policy for 2017-18
Highlights of RBI’s Second Bi - Monthly Monetary Policy for 2017-18:
Dear Readers, Reserve Bank of India (RBI) has published its Second Bi- monthly Monetary Policy Rates in Mumbai on June 7th, 2017. The Second Bi-monthly policy has been released based on the assessment of the Monetary Policy Committee of the Reserve Bank of India (RBI). It’s a fourth straight meeting whereas the policy repo rate has been kept unchanged.



The present Current Rates are given as below:
Current Rates
Remarks
Policy Rates
Policy Repo Rate
6.25%
Unchanged
Reverse Repo Rate
6.00%
Unchanged
Marginal Standing Facility Rate (MSF)
6.50%
Unchanged
Bank Rate
6.50%
Unchanged
Reserve Ratios
Cash Reserve Ratio (CRR)
4%
Unchanged
Statutory Liquidity Ratio (SLR)
20.00%
Changed.
Reduced 0.50% from earlier 20.50%.

Highlights of Second Bi - Monthly Monetary Policy:    
·        Repo rate unchanged at 6.25%.
·        Reverse repo unchanged at 6%.
·        Statutory Liquidity Ratio cut by 0.5% to 20%.
·        Growth forecast for 2017—18 lowered to 7.3% from 7.4%.
·        Inflation projected at 2-3.5% for first Half of the financial year 2017-18 and 3.5-4.5% for second half of the financial year 2017-18.
·        Implementation of the GST is not expected to have any material impact on overall inflation.
·        RBI to work with government to address stress in bank balance sheet.
·        Implementing allowances under 7th pay commission have been identified as upside risk to inflation.
·        Need to revive private investment, restore banking sector health, remove infrastructure bottleneck.
·        Next Monetary Policy Committee meeting scheduled on 1 and 2 August.

Present Member’s of the Monetary Policy committee:
1.    Urjit Patel, Governor of RBI.
2.    Michael Patra, Executive Director of RBI
3.    Rama Subramaniam Gandhi, Retired Deputy Governor of RBI
4.    Pami Dua,  Director at Delhi School of Economics
5.    Ravindra Dholakia, An economics professor of IIM Ahmedabad
6.    Chetan Ghate, Professor at Indian Statistical Institute.

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