RBI Policy: All six members of the MPC voted in favour of maintaining the status quo on policy
RBI Monetary Policy Highlights: Reserve Bank of India (RBI) Governor Shaktikanta Das-led Monetary Policy Committee announced its decision to keep the key lending rates at existing levels on Thursday. All six members of the MPC voted in favour of maintaining the status quo on monetary policy, which was in line with economists' expectations. The repo rate - or the interest rate at which the RBI lends short-term funds to commercial banks - was left steady at 5.15 per cent, the lowest level recorded in more than nine years. The Monetary Policy Committee decided to continue with an "accommodative" policy stance "as long as it is necessary to revive growth, while ensuring that inflation remains within the target". All six members of the Monetary Policy Committee voted in favour of maintaining the status quo on policy.
Here are the highlights of the RBI's sixth policy of fiscal year 2019-20:
RBI Policy: Sensex Rises Over 250 Points, Nifty Touches 12,150
Domestic stock markets rose after the announcement of policy decision with the S&P BSE Sensex index adding as much as 253.65 points to 41,396.31 and the broader NSE Nifty climbing to as high as 12,160.60, up 71.45 points from the previous close.
At 1:59 pm, the Sensex traded 249.72 points - or 0.61 per cent - higher at 41,392.38 while the Nifty was up 25.80 points - or 0.21 per cent - at 12,114.95. Gains in financial and pharmaceutical sectors pushed the markets higher however losses in consumer goods and automobile shares capped the upside. (Read More On How Markets Read RBI Policy Decision Here
RBI Policy: Consumer Inflation Projections Raised
The Reserve Bank of India said it expects consumer inflation to hit 6.5 per cent in the quarter ending March. That meant an upwards revision in its projection of 5.1-4.7 per cent for the second half of the current fiscal year.
The RBI forecast consumer inflation to be in the range of 5.4-5 per cent in the first half of fiscal year 2020-21, higher than its earlier projection of 4-3.8 per cent.
RBI Policy: Central Bank Leaves Key Rates Unchanged, Maintains "Accommodative" Stance
The Reserve Bank of India left the repo rate at the existing level of 5.15 per cent while maintaining an "accommodative" stance of policy. All six members of the Monetary Policy Committee, headed by RBI Governor Shaktikanta Das, voted in favour of maintaining the status quo on policy.
RBI Policy: Policy Statement To Be Released Shortly
The Reserve Bank of India will release its sixth bi-monthly policy statement within few minutes now.
RBI Policy: Sensex, Nifty Erase Most Of Day's Gains Ahead Of RBI Statement
Domestic stock markets started Thursday's session on a positive note, with the benchmark S&P BSE Sensex index rising as much as 199.53 points to touch 41,342.19, and the broader NSE Nifty benchmark adding 62.1 points to an intraday high of 12,151.25, after opening at 12,120.00.
At 10:54 am, the Sensex traded 39.26 points - or 0.10 per cent - higher at 41,181.92 while the Nifty was up 15.55 points - or 0.13 per cent - at 12,104.70. (Read More On Stock Markets Here
RBI Policy: Analysts Say Some Room Available For RBI To Cut Rates After Today's Pause
The RBI is forecast to next cut rates by 25 basis points to 4.90 per cent in the October-December quarter, though some analysts reckon the central bank will keep rates on hold for longer.
According to CARE Ratings chief economist Madan Sabnavis, consumer inflation appears to have peaked for the time being and there is scope for further easing of repo rate by 25-50 basis points going forward; however, any such move will be data-dependent.
RBI Policy: Central Bank Seen Staying "Accommodative" In Today's Statement
The RBI is widely expected to continue with an "accommodative" policy stance without reducing the repo rate in today's policy. According to a poll of economists by news agency Reuters conducted before the Budget announcements, the RBI is expected to keep the repo rate unchanged until at least October, when it is seen resuming its easing path.
RBI Policy: Consumer Inflation Worsened To Highest In Over 5 Years In December
Consumer inflation, or the rate of increase in consumer prices, worsened to 7.35 per cent in December - its highest level recorded in more than five years - primarily driven by food prices.
That marked the third consecutive month in which consumer inflation breached the RBI's medium-term goal of 4 per cent.
- November: 5.54%
- October: 4.62%
- September: 3.99%
RBI Policy: RBI Repo Rate Currently Stands At 5.15%
Repo rate is the key lending rate at which the Reserve Bank of India lends short-term funds to commercial banks. Currently the repo rate is at 5.15 per cent, following five reductions (four of 25 basis points each and one of 35 basis points) last year.
The central bank tracks consumer inflation primarily for formulating its monetary policy.
RBI Policy: RBI Surprised Analysts By Keeping Rates Steady In December Review
In its last bi-monthly review in December, the RBI surprised the Street by keeping the key lending rates on hold at existing levels citing inflationary concerns in the near term.
The RBI acknowledged that it does have room to cut rates further, after reducing them by a total 135 basis points over past five bi-monthly reviews.
RBI Policy: RBI Policy Statement Comes Amid Prolonged Economic Slowdown
The RBI's policy review comes at a time when the country's economy is staring at a more than 11-year low pace of expansion recorded since the 2008-09 global financial crisis, amid thousands of job losses due to weakness across sectors.
According to official estimates, the economy is forecast to grow 5 per cent in the year ending in March.
RBI Policy: RBI Top Brass To Hold Press Conference At 12:00 Noon
The RBI's top management will interact with the media in Mumbai from 12:00 noon to 12:45 pm. RBI Governor Shaktikanta Das will address the media 15 minutes after the release of the sixth bi-monthly policy statement of the current fiscal year.
RBI Policy: MPC To Release Statement At 11:45 AM
The Monetary Policy Committee, headed by RBI Governor Shaktikanta Das, will release a policy statement at 11:45 am. The policy statement comes after a three-day meeting of the MPC which began on Tuesday, February 4.
This will be the RBI's sixth bi-monthly monetary policy statement of the current financial year.