The central bank’s monetary policy committee under the aegis of RBI Governor Urjit Patel shall meet on Wednesday to take a decision on whether repurchase rate (Repo rate) should be hiked or cut with respect to India's economic scenario.
The monetary authority will announce its decision at 2:30 p.m. in Mumbai followed by a press conference 15 minutes later.
The RBI’s six-member panel voted unanimously to keep rates unchanged in December as it wanted to assess the impact of the cash clampdown and the Fed’s stance. It reiterated its commitment to the inflation target and warned about the risk of rebounding oil prices.
The repurchase rate (repo rate) is the interest rate at which the RBI lends money to commercial banks, which in turn extends it to customers for home loans and car loans and to companies for infrastructure development. A cut in the repo rate makes retail loans cheaper, thus boosting the economy, whereas an increase reins in economic activity and controls inflation. The repurchase rate is currently 6.25%.
A Bloomberg poll of economists found that most (30 of 33) expected the RBI to cut the repo rate to 6% while 28 of 46 participants in a Reuters poll expected a cut.
Here are the live updates from the RBI's Monetary policy review:
# Repo Rate unchanged at 6.25 per cent
# Reverse Repo Rate also remains unchanged at 5.75 per cent
#RBI keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25 per cent. Consequently, the reverse repo rate under the LAF remains unchanged at 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent.
# Expected growth for fiscal year 2017-18 estimated at 7.4 percent
# The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving consumer price index (CPI) inflation at 5 per cent by Q4 of 2016-17 and the medium-term target of 4 per cent within a band of +/- 2 per cent
#RBI says expected growth is 6.9 percent for 2016-17 fiscal year ending in the month of March
#RBI changes policy stance from "accommodative" to "neutral".
#Sensex plunges 180 points as RBI keeps repo, reverse repo rate unchanged
# The monetary policy committee is "committed to bringing headline inflation closer to 4.0 per cent on a durable basis and in a calibrated manner"
#January-March retail inflation below 5 per cent
# Surplus liquidity to fall with progressive remonetisation; abundant liquidity with banks may persist into early months of FY18.
#RBI decides to form a separate enforcement department for stricter enforcement of its regulatory and supervisory actions.
# No limit on cash withdrawal from savings bank accounts starting 13 March
# Limit on cash withdrawal from savings backs accounts to be relaxed in 2 stages. From 20 Feb limit to be increased from Rs 24k to Rs 50k
# Newly issued notes of Rs.2000 and Rs.500 are difficult to copy, the ones being found are photo copies
# Total 9.92 lakh crore rupees of total currency including new notes of 500 & 2000 is in circulation as of 27th January
# India's banking system is robust, saying there are flaws because of few incidents is wrong: Dy Guv RBI, SS Mundra