RBI speaks on Second ‘Bi-monthly Monetary Policy Statement, 2018-19’

NewsBharati    06-Jun-2018
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New Delhi, June 6: After a gap of four years, The Reserve Bank of India (RBI) hiked repo rate, the rate at which it lends short-term money to banks by 25 basis points to 6.25 percent today. RBI Governor Urjit Patel spoke on the  Second ‘Bi-monthly Monetary Policy Statement, 2018-19.’


 

All six members of the Monetary Policy Committee (MPC) including RBI Governor Urjit Patel voted for a 0.25 percent repo rate hike. Earlier, in four previous policy reviews, the Reserve Bank of India's (RBI) six-member Monetary Policy Committee (MPC) left the repo, or short-term interest rate for commercial banks, unchanged at 6 percent, according to the RBI statement.

As per official data, retail inflation based on the Consumer Price Index (CPI) rose to 4.58 percent in April, from 4.28 percent in March, but remained outside the RBI's medium-term target of 4 percent.

The hike in the repo rate is likely to make the interest rates on loans dearer as it will make borrowing for banks expensive and they may charge higher from customers.

In the second bi-monthly monetary policy for the current fiscal, the RBI projected inflation for 2018-19 at 4.8- 4.9 percent in the first half and 4.7 percent in the second half of the year.

The central bank retained the Gross Domestic Product (GDP) growth for the financial year 2018-19 at 7.4 percent. The Reserve Bank projected India's GDP growth at 7.5-7.6 percent in the first half and 7.3-7.4 percent in the second half.

 

"Gross domestic product (GDP) growth for 2017-18 has been revised and estimated at 6.7 percent backed by an all-time high production of food grains and horticulture, strengthening of industrial growth and resilient services sector activity," RBI Governor Urjit Patel said in a press conference.