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Reserve Bank of India (RBI) on Friday kept interest rates unchanged.

News Detail

  • Reserve Bank of India (RBI) on Friday kept interest rates unchanged.
    2018-10-05, By: System Administrator

    The six-member monetary policy committee led by Governor Urjit Patel voted 5-1 to keep the repo rate at 6.50%.

    India's monetary policy committee surprised markets by keeping interest rates unchanged, as it awaits for greater clarity on the evolving growth-inflation scenario in the economy. The six-member panel, however, changed its stance from 'neutral' to 'calibrated tightening', suggesting more rate hikes lie ahead.

    Separately and importantly, in a measure which seemed to be aimed at curbing currency volatility, the Reserve Bank of India proposed a 'voluntary retention scheme' for foreign portfolio investors. The scheme offers increased investment flexibility to investors who choose to retain a portion of their investments in India for a time period of their choosing.(Source : Bloomberg)

    Key Takeaways

    • MPC keeps repo rate unchanged at 6.5 percent
    • MPC changes stance from neutral to 'calibrated tightening'
    • Repo rate kept unchanged by a 5-1 vote; Chetan Ghate voted for a rate hike
    • Stance changed by a vote of 5-1; Ravindra Dholakia voted for a neutral stance
    • RBI proposes voluntary retention route for FPIs in debt markets
    • Inflation projected at 3.9-4.5 percent in H2 and 4.8 percent in Q1 of financial year 2019-20
    • GDP growth seen at 7.4% in FY19 & 7.6% in FY20
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