MPC cuts interest rate by a quarter point

This was the first monetary policy statement of the new RBI governor Urjit Patel

GN Bureau | October 4, 2016


#interest rates   #monetary policy   #Reserve Bank of India   #Urijit Patel   #RBI   #repo rates  
Reserve Bank of India
Reserve Bank of India

In the fourth bi-monthly monetary policy statement, the Reserve Bank of India’s monetary policy committee (MPC) reduced the repo rate by 25 basis points, from 6.5 percent to 6.25 percent. The MPC, headed by the newly appointed RBI governor Urjit Patel, said that its decision was “consistent with an accommodative stance of monetary policy in consonance with the objective of achieving consumer price index (CPI) inflation at 5 percent by Q4 of 2016-17 and the medium-term target of 4 percent within a band of +/- 2 per cent, while supporting growth”.

The committee, which has three eminent economists as independent members, said it expected that the strong improvement in sowing, along with supply management measures, would improve the food inflation outlook. “The government has announced several measures to cool food inflation pressures, especially with regard to pulses. These measures should help in moderating the momentum of food inflation in the months ahead,” the MPC said.

The committee added that the momentum of growth is expected to quicken with a normal monsoon raising agricultural growth and rural demand, as well as by the stimulus to the urban consumption spending from the pay commission’s award. “The accommodative stance of monetary policy and comfortable liquidity conditions should support a revival of credit to the productive sectors,” it said.
 

Comments

 

Other News

An eye on AI

Google Assistant, Rekognition and Tay. All these, often seen in news, have a common thread – they are powered by Artificial Intelligence (AI). Only difference is that while some have been in news for right reasons, some others have made it to the headlines for all the wrong reasons. For instance, Goo

Data-powered economy

1.33 billion. Let that large number sink in. That number is nearly 18 percent of the total global population, and almost the number of people estimated to currently reside in the republic of India, one of the world’s largest and fastest growing economies. These 1.33 billion people are spread across a

Dams or time bombs?

Kerala is limping back to normal after the devastating floods that wreaked havoc in the state prompting red alert in all 14 of its districts. While the rescue activities and immediate relief are now a thing of the past, the state is struggling to turn a new page and the focus is on reconstruction an

The imprint of the Gurjara Pratiharas

On August 16, when the country lost its beloved former prime minister Atal Bihari Vajpayee, a nondescript village, 70 km from Agra, came into the limelight. Bateshwar, the ancestral village of Vajpayee, is situated along the notorious Chambal ravines on the banks of the Yamuna. Vajpayee&rsq

Imagining the worst

Love Sonia is not a film you would want to watch if you knew its subject: sex trafficking. Without even a scene experienced, the subject induces visceral revulsion. However optimistic the screenplay, it can only deal in ugly dregs and bring up retching bile. Even so, Love Sonia, gritty an

India’s balancing act with China

On the first day of his August 19-20 visit to India, when Japanese defence minister Itsunori Onodera held talks with his Indian counterpart Nirmala Sitharaman, several defence and strategic-related issues had cropped up in their annual talks. But a big smile flashed on Sithraman’s face when Onodera,

Current Issue

Current Issue

Video

CM Nitish’s convoy attacked in Buxar

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter