RBI Monetary Policy: Urjit Patel-led MPC offers respite to borrowers, cuts interest rates by 0.25%

Mangalore Today News Network

Aug 02, 2017: A significant moderation in retail inflation over the past three months has reinforced calls for further monetary policy easing from the central bank, which changed its stance to neutral from accommodative at the start of the year.

On  the state of the economy,  the MPC is of the view that there is an urgent  need to reinvigorate private investment, remove infrastructure bottlenecks and provide a major thrust to  the Pradhan  Mantri  Awas  Yojana for  housing  needs  of  all. 

The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of  achieving the medium-term target for  consumer price  index (CPI) inflation of  4 percent within  a  band  of  +/-  2  percent,  while supporting  growth.

Consequently, the reverse repo rate under the LAF stands adjusted to 5.75 percent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.25 percent.

Both Sensex and Nifty were slightly lower ahead of policy announcement. Interest rate sensitive bank, realty and auto stocks are in focus.

RBI’s monetary policy committee (MPC) is scheduled to announce its decision on interest rates at 2.30 pm today.

The Reserve Bank of India (RBI) is likely to cut its main policy rate (repo) by 0.25 percent to 6 percent - the lowest since November 2010 (6.5-year low).

Courtesy: Zeenews