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6 June 2018
 |
| RBI
(The Total Investment & Insurance Solutions) |
The
Reserve Bank of India (RBI) on Wednesday hiked the key policy rates for first
time in four years.
RBI
hiked the repo rate by 25 basis points to 6.25 percent and the reverse Repo
rate to 6 percent, the first increase since January 2014 and kept the stance
neutral.
On
the basis of an assessment of the current and evolving macroeconomic situation
at its meeting today, the 6-member Monetary Policy Committee (MPC) decided to
hike the rates with all the members voting in favour of a rate hike.
RBI
in its first bi -monthly resolution of 2018- 19 in April projected CPI
inflation in the range of 4.7- 5.1 percent in H1:2018- 19 and 4.4 percent in
H2, including the HRA impact for central government employees with risks tilted
to the upside. The 10-year benchmark bond yield rose 4 basis points to 7.87
percent after the monetary policy announcement while the rupee was at 66.97 to
the dollar from 67.05 before the news.
According
to the early results of the Reserve Bank’s IOS , activity in the manufacturing
sector is expected to moderate marginally in Q2:2018- 19 on account of
deterioration in the overall business situation and order book.
The
Central Bank has retained GDP growth for 2018- 19 at 7.4 percent in the April
policy. "GDP growth is projected in the range of 7.5- 7.6 percent in H1
and 7.3- 7.4 percent in H2 , with risks evenly balanced," RBI said.
Indian
economy grew at 7.7 percent during January-March quarter (Q4) of financial
year 20171-18 compared to 6.1 percent a year ago, driven by gains in
manufacturing and consumer spending, Central Statistics Office data showed last
week.
RBI
has revised CPI inflation for 2018-19 to 4.8-4.9 percent in H1 and 4.7 percent
in H2. 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.The Total Investment
& Insurance Solutions
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