After four and a half yrs, RBI hikes repo rate by 25 basis points
The Reserve Bank of India’s (RBI’s) monetary policy committee (MPC) has decided to increase the key repo rate—the rate at which the central bank infuses liquidity in the banking system—by 25 basis points to 6.25%.
The Reserve Bank Governor Urjit Patel, in a media briefing, said that the rates have been hiked after "a prolonged pause".
Deputy governor Viral Acharya said that RBI will use appropriate instruments to manage liquidity as the surplus is likely to dip later this month.
With all the six members voting for a increase in policy rates, the Monetary Policy Committee raised "repo rate by 25 basis points and kept the stance neutral", RBI said in a statement here.
Excluding the impact of HRA revisions, CPI-based inflation is projected at 4.6 per cent in first half of 2018-19, and 4.7 per cent in H2, the RBI said.The RBI retained the GDP growth for the financial year 2018-19 at 7.4 per cent.
“The resulting pick-up in the momentum of inflation excluding food, fuel and HRA has imparted persistence into higher CPI (Consumer Price Index) projections for 2018-19,” RBI said in the policy.
“Crude oil prices have been volatile recently and this imparts considerable uncertainty to the inflation outlook – both on the upside and the downside,” it said.
-PTC News
