Taking markets by surprise, RBI Governor Urjit Patel-led 6-member Monetary Policy Committee announced the decision to keep the repo rate unchanged contrary to wide speculation that RBI will cut 25 basis points.
Markets reacted negatively with the S&P BSE Sensex plunging as much as 170 points and the Nifty losing ober 45 points.
Here are the key takeaways from RBI's fifth bi-monthly monetary policy statement:
- Repo rate unchanged at 6.25%, Reverse Repo at 5.75%
- Cash reserve ratio or CRR unchanged at 4%
- Cuts growth forecast to 7.1%, from 7.6% for this fiscal
- Inflation target remains 5% for March 2017, upside risk
- Demonetisation to lower prices of perishables, could reduce inflation by 10-15 basis points by December
- All MPC members voted in favour of status quo in policy
- Demonetisation to result in short-run disruptions in cash-intensive sectors
- Crude price volatility, surge in financial market turbulence could put March end inflation target at risk
- Foreign exchange reserve rose to all-time high of USD 364 billion on December 2
- RBI injected Rs 1.1 lakh crore liquidity through OMO purchases this fiscal
The next monetary policy will be held on February 8, 2017
(With inputs from PTI)
Special 
