Moneycontrol
you are here: HomeNewsEconomyPolicy
Dec 06, 2017 04:01 PM IST | Source: Moneycontrol.com

RBI Monetary policy review: Key takeaways from the meeting

Here are the key takeaways from the policy.

Moneycontrol News @moneycontrolcom
The Monetary Policy Committee (MPC) on Wednesday left the crucial policy repo rate and reverse repo rate unchanged at 6 percent and 5.75 percent, respectively. Here are the key takeaways from the policy:
1/9

The Monetary Policy Committee (MPC) on Wednesday left the crucial policy repo rate and reverse repo rate unchanged at 6 percent and 5.75 percent, respectively. Here are the key takeaways from the policy:

5 out 6 MPC members voted for no change in rates. MPC member Ravindra Dholakia voted for a 25 basis repo rate cut. (In pic: RBI Governor Urjit Patel - Reuters)
2/9

5 out 6 MPC members voted for no change in rates. MPC member Ravindra Dholakia voted for a 25 basis repo rate cut. (In pic: RBI Governor Urjit Patel - Reuters)

The committee expects inflation to rise and range around 4.3-4.7 percent in Q3 and Q4 of FY18. Inflation is likely to be impacted by factors like the impact of house rent allowance, which will peak in December, and rise in international crude prices.
3/9

The committee expects inflation to rise and range around 4.3-4.7 percent in Q3 and Q4 of FY18. Inflation is likely to be impacted by factors like the impact of house rent allowance, which will peak in December, and rise in international crude prices.

Vegetable prices, which soared in recent times are expected to moderate in coming months. The MPC will also carefully monitor the evolving trajectory in relation to cost of living conditions (food) and inflation outlook. (Image: Reuters)
4/9

Vegetable prices, which soared in recent times are expected to moderate in coming months. The MPC will also carefully monitor the evolving trajectory in relation to cost of living conditions (food) and inflation outlook. (Image: Reuters)

There is a possibility of fiscal slippage with the implementation of farm loan waivers by certain states, a partial rollback of excise duty and VAT and a decrease in revenue due to implementation of the Goods & Services Tax.
5/9

There is a possibility of fiscal slippage with the implementation of farm loan waivers by certain states, a partial rollback of excise duty and VAT and a decrease in revenue due to implementation of the Goods & Services Tax.

Another risk for inflation could be the uncertainty over monetary policy normalistaion in advanced economies.
6/9

Another risk for inflation could be the uncertainty over monetary policy normalistaion in advanced economies.

While kharif production and rabi sowing could impact agriculture, the RBI expects credit growth to improve, especially with bank recapitalisation plan in place.
7/9

While kharif production and rabi sowing could impact agriculture, the RBI expects credit growth to improve, especially with bank recapitalisation plan in place.

While weakness in some sectors like real estate is visible, services and infrastructure sentiment is expected to improve in Q4. The overall business scenario is also expected to improve.
8/9

While weakness in some sectors like real estate is visible, services and infrastructure sentiment is expected to improve in Q4. The overall business scenario is also expected to improve.

Debit card transactions will get a boost as the Reserve Bank of India will put a limit on merchant discount rate (MDR) and create a framework for asset-light acceptance infrastructure.
9/9

Debit card transactions will get a boost as the Reserve Bank of India will put a limit on merchant discount rate (MDR) and create a framework for asset-light acceptance infrastructure.

Sections
Follow us on
Available On