Sixth Bi-Monthly Monetary Policy Statement, 2015-16: RBI maintains status quo

GVA growth for 2016-17 is projected at 7.6 per cent

The RBI in its sixth bi-monthly Monetary Policy Statement, 2015-16, kept the policy rates unchanged after reducing it by 50 bps in the fourth bi-monthly Monetary Policy Statement, 2015-16. The policy repo rate, at which it lends to the scheduled banks borrowing for short liquidity gaps, under the liquidity adjustment facility (LAF) thus stands unchanged to 6.75 per cent, while it awaited the out-turn of the complete monsoon cycle and the Federal Reserve move on the US interest rates. It also kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liabilities (NDTL). Also the central bank will continue to provide liquidity under overnight repos at 0.25 per cent of bank-wise NDTL at the LAF repo rate and liquidity under 14-day term repos as well as longer term repos of up to 0.75 per cent of NDTL of the banking system through auctions and will continue with daily variable rate repos and reverse repos to smooth liquidity.

Consequently, the reverse repo rate under the LAF stands adjusted to 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 7.75 per cent.

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