Urjit Patel led-Monetary Policy Committee of RBI keeps repo rate unchanged at 6.50% for second time in a row
Monetary Policy Committee India, led by RBI Governor Urjit Patel keeps the repo rate unchanged at 6.5%
The RBI Governor Urjith Patel led-Monetary Policy Committee India maintained the repo rate unchanged at 6.5%, as part of having a tight leash on the “calibrated tightening of policy, for the second time in a row. Similarly, the reverse repo rate is at status quo at 6.25%.
In a statement issued by the Central Bank said, The decision of the Monetary Policy Committee is consistent with the stance of calibrated tightening of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/-2 per cent, while supporting growth.”
SLR cut by 25 basis points
The RBI, meanwhile, has cut the statutory liquidity ratio was cut by 25 basis points to 19.25% from January 1, 2019. The RBI statement further stated that the SLR will be cut persistently by 25% every quarter until it touches the 18% level. While retaining the GDP growth projection for FY 2019 at 7.4%, the first half of 2019-20, the GDP has been forecast at 7.5%, the Central Bank further added that the inflation in the second half of the current fiscal is pegged at 2.7-3.2%. The next Monetary Policy is scheduled to be announced on February 7, 2019.
Ankur Dhawan, Chief Investment Officer, PropTiger.com, said, “Increase in repo rate at this point of time would have been a very bad news for real estate industry which is already going through fund constraints due to NBFC liquidity issue. In fact industry was hoping if rates could have been reduced in this MPC meeting to revive industry. No change in repo rate is a slightly negative news for the industry.”
Shishi Baijal CMD, Knight Frank India said that more or less, the decision was unsurprising and were on the expected lines, which would eventually be unnerving factor for the real estate segment, who had been a worried lot. In case of a repo rate increase, the real estate will impact the industry in a big way. Rajiv Sabharwal, MD & CEO, Tata Capital said that RBI’s decision will by all means encourage the investor sentiment.