RBI Monetary Policy: RBI does not change repo rate, retains at 6.5 per cent

The six-member Monetary Policy Committee (MPC) chaired by Governor Urjit Patel, Reserve Bank of India (RBI) has announced the credit policy of the Reserve Bank on Friday.

RBI Monetary Policy: RBI does not change repo rate, retains at 6.5 per cent

MUMBAI: The six-member Monetary Policy Committee (MPC) chaired by Governor Urjit Patel, Reserve Bank of India (RBI) on Friday announced the credit policy of the Reserve Bank. Although he changed the policy stance and made it harder rather than neutral. Most analysts and bank officials believed that the central bank would increase policy rates by at least 0.25 percent. After the three-day meeting of the Reserve Bank of Monetary Policy Committee (MPC), it said, "The committee firmly repeats the commitment of keeping the medium-term inflation or middle-term target under four percent." The Reserve Bank's repo rate is 6.5 Percentage and reverse repo rate will remain 6.25 percent.

Five members of the committee voted favorably to keep rates. Only Chetan Ghate took the side of 0.25 percent growth alone. The committee, headed by Reserve Bank Governor Urjit Patel, said that the recent reduction in the excise duty of petrol and diesel by the government will help to keep inflation under control. RBI said retail inflation would increase to 4.5 percent by the end of March, 2019. There is also the risk of going upstairs. The Reserve Bank has kept the economic growth rate in the current fiscal at 7.4 percent. The growth in the financial year 2019-20 could reach 7.6 percent.

The Reserve Bank had increased the key policy rate in the second bi-monthly review meeting in June for the first time since the interval of four and a half years. After this, the Reserve Bank had raised the repo rate, ie 0.25 percent in the short-term rate, in August's policy meeting. After two consecutive increase of 0.25 percent, the repo rate at this time is 6.50 percent. According to experts, crude oil prices rise, rupee fall and current account deficit are some of the factors, in which the policy makers have to keep in mind the decision of interest in terms of interest rate.

RBI's announcement effect, Sensex 299 and Nifty closed with a gain of 77.85 points

On Wednesday, the rupee depreciated further to USD 73.25 a dollar against the US dollar and Brent crude was close to $ 85 a barrel. Rajkiran Rai, Managing Director and Chief Executive Officer (CEO) of Union Bank of India said, "With the increase in prices of petrol and diesel, it is believed that inflation will also increase, hence, steps can be taken as precautionary measures. It seems that the repo rate will increase by 0.25 percent. " Despite the rise in crude oil prices, the inflation figure dropped to 3.69 percent in August compared to 4.17 percent for the month of July. Another public sector bank chief said that considering the macroeconomic situation, the monetary review meeting next to the Reserve Bank may increase the repo rate by 0.25 percent.

RBI lays down rules for improving cash situation

HDFC Vice Chairman and Chief Executive Keki Mistry said, "At this time, considering the currency exchange rate, I think they will increase the interest rate by up to quarterfinal in the next review meeting." SBI has said in its research report, EcoRP that the Reserve Bank should increase the policy interest rate by at least 0.25 percent to stop rupee depreciation