Reserve Bank of India

April 5, 2018

The RBI Monetary Policy Committee’s first bimonthly policy statement of fiscal 2018/19 notes that the future trajectory of CPI inflation now seems likely to be somewhat lower than that imagined two months ago due lower food and fuel costs. Inflation of 4.4% in February was close to the 4% medium-term target midpoint. But domestic demand should strengthen, reducing India’s output gap, and measures of expected inflation have edged a bit higher. Several uncertainties surround the inflation outlook, and all in all it was decided that keeping the neutral policy stance would be the right thing to do. so the 6.0% repo rate, 5.75% reverse repo, and 6.25% marginal standby facility rate were all left unchanged. The last repo rate change was a 25 basis point cut done in August 2017, which brought its cumulative reduction since 2015 to two percentage points.

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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