Key takeaways from RBI Monetary Policy announcement

Key takeaways from RBI Monetary Policy announcement

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.

BusinessToday.In
  • New Delhi,
  • Dec 07, 2016,
  • Updated Dec 07, 2016, 3:58 PM IST

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:

 

  1. Repo rate unchanged at 6.25%, Reverse Repo at 5.75%
  2. Cash reserve ratio or CRR unchanged at 4%
  3. Cuts growth forecast to 7.1%, from 7.6% for this fiscal
  4. Inflation target remains 5% for March 2017, upside risk
  5. Demonetisation to lower prices of perishables, could reduce inflation by 10-15 basis points by December
  6. All MPC members voted in favour of status quo in policy
  7. Demonetisation to result in short-run disruptions in cash-intensive sectors
  8. Crude price volatility, surge in financial market turbulence could put March end inflation target at risk
  9. Foreign exchange reserve rose to all-time high of USD 364 billion on December 2
  10. 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)

Read more!
RECOMMENDED