1st Bi-Monitory Policy Committee Report of FY 2018-19

Dear Aspirants the Monitory Policy Committee (MPC) of RBI has announced this Fiscal Year’s First Bi monthly monitory policy Report of the FY 2018-19. Candidates those who are preparing for IBPS / SBI / SSC / Insurance exam and all other competitive exams can use this.

Monetary Policy Committee of India:

The Monetary Policy Committee of India is a committee of the Reserve Bank of India that is responsible for fixing the benchmark interest rate in India. The committee was created in 2016 to bring transparency and accountability in fixing India’s Monetary Policy .The meetings of the Monetary Policy Committee are held at least 4 times a year and it publishes its decisions after each such meeting.

The committee comprises six members’ three officials of the Reserve Bank of India and three external members nominated by the Government of India. The Governor of Reserve Bank of India is the chairperson ex official of the committee. Decisions are taken by majority with the Governor having the casting vote in case of a tie. The current mandate of the committee is to maintain 4% annual inflation until March 31, 2021.

Always Inflation should maintain between 2% to 6%.

Current Members of MPC:

  • Governor of the Reserve Bank of India – Chairperson – Urjit Patel
  • Deputy Governor of the Bank, in charge of Monetary Policy – Viral A Acharya
  • One officer of the Reserve Bank of India to be nominated by the Central Board – Michael Patra
  • Shri Chetan Ghate, Professor, Indian Statistical Institute (ISI) – Member;
  • Professor Pami Dua, Director, Delhi School of Economics – Member;
  • Ravindra H. Dholakia, Professor, Indian Institute of Management, Ahmadabad – Member

1st Monitory Policy Committee Report Of Fy-2018-19 (Highlights):

  • On the basis of an assessment of the current and evolving macroeconomic situation1 at its meeting today, the Monetary Policy Committee (MPC) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.0 per cent.
  • Consequently, the reverse repo rate under the LAF remains at 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.25 per cent.
  • The decision of the MPC is consistent with the neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth. The main considerations underlying the decision are set out in the statement below.
Policy Repo Rate 6.00% Unchanged
Reverse Repo Rate 5.75% Unchanged
Marginal Standing Facility Rate 6.25% Unchanged
Bank Rate 6.25% Unchanged
Cash Reserve Ratio (CRR) 4.00% Unchanged
Statutory Liquidity Ratio (SLR) 19.50% Unchanged
CPI Inflation Forecast 4.7-5.1 Changed From 5.1-5.6

RBI cuts inflation forecast for FY19 to 4.7-5.1%:

The RBI Monetary Policy Committee (MPC) on Thursday cut the consumer price index (CPI) inflation forecast for the first half of FY19 to 4.7-5.1 percent from the previous estimate of 5.1-5.6 percent, including the  including the HRA impact for central government employees, with risks tilted to the upside.

After excluding the impact of HRA revisions, the MPC projected CPI inflation at 4.4-4.7 percent in the first half of FY19 and 4.4 percent in the second half. A moderation in food prices, international crude oil prices, the statistical impact of an increased HRA for central government employees and domestic demands into account while calculating the inflation.