FinMin says RBI's assessment of economy in line with govt's reading

The finance ministry Wednesday said the assessment of growth and inflation made by the RBI's Monetary Policy Committee (MPC) is line with government's reading.

RBI Governor Urjit Patel-headed MPC has kept the key lending rate unchanged. The panel retained its GDP growth projection of the current fiscal at 7.4 per cent and expects inflation to remain well below the mid-term target of 4 per cent.

"The assessment of the MPC for growth and inflation outlook is consistent with the government's assessment of inflation and growth," said Subhash Chandra Garg, Secretary, Economic Affairs, in a statement.

The government, he said, welcomes the assessment made by the MPC.

The RBI has also decided to reduce Statutory Liquidity Ratio or portion of funds banks have to mandatorily park in government securities from existing 19.5 per cent to 18 per cent in six quarterly instalments beginning January 2019.

"This will have some implications for the government securities. However, the momentum created by the reduction in oil prices and reversal of foreign flows has resulted in further moderation of yields post policy announcement," Garg said.

Next meeting of the six-member MPC will take place for three days from February 5, 2019.