RBI monetary policy: Cooling of inflation risks opening up possibility of another rate cut—सविस्तर माहितीसाठी Financial Express मधील बातमी वाचावी.

In line with our expectations, the Monetary Policy Committee (MPC) of Reserve Bank of India (RBI) decided to leave the repo rate unchanged and retained the neutral stance of monetary policy in the second policy review for FY18. Notably, this is the first instance that the MPC’s decision was not unanimous. The repo rate was maintained at 6.25% in the June 2017 policy even though the CPI inflation has printed below 4% (the medium term target) for six consecutive months and economic growth in Q4 FY2017 surprised on the downside, with the committee cautioning that premature action could risk subsequent disruptive reversals, entailing some loss of credibility. In terms of the outlook for FY18, the MPC forecasts a strong rebound of 70 bps in growth of gross value added (GVA) at basic prices to 7.3%, from 6.6% in FY2017. Additionally, the MPC continues to expect the CPI inflation trajectory to slope upward during FY18, from a low 2.0-3.5% in H1 to 3.5-4.5% in H2, and expressed some doubts whether the unusually low reading in April 2017 would endure. The MPC highlighted that underlying inflation pressures related to input costs, wages and imported inflation warrant close and continued monitoring. Additionally, farm loan waivers, and the fiscal slippages that they may engender, were flagged as an inflationary risk.

via RBI monetary policy: Cooling of inflation risks opening up possibility of another rate cut – The Financial Express