RBI cuts key rate by 0.25% and other highlights

Growth forecast unchanged at 7.3% for the current fiscal, says Governor Urjit Patel

Following are the highlights of the third bi-monthly Monetary Policy Statement issued by RBI:

 

• Key policy rate reduced by 0.25 per cent to 6 pc.
• Reverse repo rate cut by 0.25 pc to 5.75 pc.
• Focus on keeping headline inflation close to 4 pc on durable basis
• Some risks to inflation have reduced or not materialised.
• Growth forecast unchanged at 7.3 pc for the current fiscal.
• Pushes for reinvigorating private investments, clearing infra bottlenecks and providing big thrust to PMAY.
• Forex reserves at USD 392.9 billion as on July 28.
• Four members of Monetary Policy Committee voted in favour of 0.25 pc rate cut.
• Farm loan waivers by states may result in fiscal slippages, undermine public spending quality.
• Government, RBI working to resolve large NPAs and recapitalise public sector banks.
• High levels of stress in twin balance sheets – banks and corporations – are likely to deter new investment.
• Next MPC meeting on October 3 and 4, 2017.