Samikhsya Bureau
Reserve Bank of India (RBI), in its first bi-monthly monetary policy meet of financial year FY19-20, today decided to cut repo rate by 25 basis points (bps) or 0.25 percent to 6 per cent. The Central bank has maintained the policy stance at “neutral”.
It has also revised its GDP growth forecast between 6.8 per cent and 7.1 per cent in the first half of the fiscal and at 7.3 per cent to 7.4 per cent in the second half.
It had earlier projected GDP growth for 2019-20 at 7.4 per cent in the range of 7.2-7.4 per cent in the first half, and 7.5 per cent in the third quarter and estimated retail inflation at between 3.2 per cent and 3.4 per cent for the first half of the fiscal.
The bank expects CPI inflation at 2.4 per cent in January to March and 3.5 per cent to 3.8 per cent in the second half of the fiscal.
As the inflation was easing, the RBI in its last policy revision on February 7 cut the repo rate by 25 basis points to 6.25 per cent and changed the monetary policy stance from calibrated tightening to neutral.
The RBI also noted several uncertainties clouding its inflation outlook. “Early reports suggested some probability of El Nino effects in 2019. There is also the risk of an abrupt reversal in vegetable prices, especially during the summer months,” the RBI said.
The central bank also noted that crude oil prices have risen around 10 per cent since the last policy.
The minutes of the MPC’s meeting will be published by April 18, 2019.
Of 6 member committee, four voted for the decision while two were saying to keep the policy rate unchanged.
Those who voted for the decision were Pami Dua, Ravindra H Dholakia, Michael Debabrata Patra and Shaktikanta Das while Chetan Ghate and Viral V Acharya voted to keep the policy rate unchanged.
The next meeting of the MPC will be on June 6. (With inputs from UNI)
