RBI's Monetary Policy

The six-member MPC also kept policy stance unchanged at 'accommodative' for "as long as necessary" to revive growth

The only way to boost demand may be lowering interest rates to boost consumption, analysts said

Anarock Chairman Anuj Puri said RBI's move will push credit flow into all industries reeling under the impact of the coronavirus

The finance ministry has been nudging public sector banks to pass the whole repo rate cuts to retail loans for pushing consumption

The RBI said it will place the resolution of the MPC on its website before noon on February 6

Soft spoken, articulate, and celebrated for his disciplined and original research work, Patra is known to take hawkish stance who constantly prefers rate hikes

Since the scope of supporting growth through fiscal and monetary policy is fairly limited, economic revival will ultimately depend on policy reforms

The 6-member Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, unanimously voted to hold the key repo rate at 5.15% and reverse repo rate at 4.90%

Key takeaways from RBI's monetary policy meet

GDP growth forecast for FY20 has been revised downwards from 6.1 per cent in the October policy to 5 per cent

Citing geo-political uncertainties and elevated food prices, the RBI revised inflation projection upward to 3.4 per cent for Q2FY20, while projections were retained at 3.5-3.7 per cent for H2FY20

The central bank is likely to cut repo rate for the fifth time in a row

Wait and watch may be a prudent approach

One of them is how reliable the model is that the RBI uses to forecast inflation

No material risk of second-round inflation effects from HRA hikes by the 7th Pay Commision