RBI: Repo rate reduced by 25 basis points

RBI Policy MPC Cuts Benchmark Rate RBI Governor Emphasises Growth

The RBI's monetary policy committee (MPC) cut the repo rate by 25 basis points to 6.25 percent, as forecast by 21 of 65 analysts polled by Reuters.

Das, in his maiden monetary policy review, has moved away from the usual practice of announcement 2:30 pm.

Four of the six MPC members voted to cut the rates, while all backed the change in stance. The MPC has also made a decision to change the monetary policy stance from "calibrated tightening" to "neutral".

This was the first policy of RBI Governor Shaktikanta Das, who heads the MPC. "Investment activity is recovering supported mainly by public spending on infrastructure", RBI Governor said.

Thursday's cut is welcome news for Prime Minister Narendra Modi's government, which wants to boost lending and lift growth as it faces elections by May.

The BJP led national alliance is already in poll mode and announced several sops at its interim budget on February 1. This is the first rate cut announced by the MPC since August 2017.

The Central Statistics Office (CSO) in the data released had pegged the growth rates of agricultural, forestry, fishing and mining industry at 5%, of manufacturing, electricity, gas, water supply and other utility services at 6% and the services sector at 8.1% as against the growth estimates of 6.8%, 7.5% and 8.4% of the respective sector. The repo rate at which banks borrow from the central bank now stands at 6.25 per cent from 6.5 per cent.

More news: Kristaps Porzingis on New York Knicks fans: "Stay woke"

Addressing a press conference after the policy meeting, Das said inflation rate for the first half of the next financial year is estimated at 3.2%-3.4%.

In a tweet, Economic Affairs Secretary Subhash Chandra Garg welcomed the rate cut and stance change, saying the MPC had come up with a "balanced and pragmatic policy statement".

Inflation slowed to an 18-month low of 2.2 percent in December, remaining well below the Reserve Bank of India's medium-term target of 4 per cent.

Nomura is of the view that RBI's new growth forecasts are too optimistic. "It also signals a commitment to a symmetric policy to achieve its 4 per cent inflation target - a departure from the RBI's previous one-sided, conservative stance that aimed to keep inflation below the target."- Abhishek Gupta, Bloomberg Economics.

"To see this as a capitulation of the government's demands is profoundly misguided", said Abheek Barua, chief economist of HDFC Bank.

Indian shares pared gains while ten-year bond yields slid five basis points after the surprise rate cut.

Related News:



Most liked

Measles Cases Soar to Decade High in Europe With 72 Deaths
Unvaccinated people who may have been exposed to the virus are urged to get vaccinated, Graham said. The Philippines is also battling a major outbreak, with more than 1,800 cases and 26 deaths.

Facebook Messenger gets WhatsApp's biggest feature: Here's how you can use it
It's pretty simple to delete a message, just tap on the post you want to remove and select the " Remove for Everyone " option. RANDI Zuckerberg was brought in by her brother to work at Facebook in 2004 when the fledgling start-up had just 50 employees.

Schiff Reopens Intel Panel Probe into Russia-Trump, Gives Mueller Docs
The Democrat also added that the intelligence panel will be aided by other congressional committees during their investigation. Cohen is still expected to appear before the Senate Intelligence Committee for a closed-door interview next Wednesday.

Secretary of State Pompeo hosts Global Coalition to Defeat ISIS
He said the world was entering "an era of decentralised jihad", and said the U.S. would call on its allies for help "very soon". Now there are 14,000 U.S. troops stationed in Afghanistan . "But we're-yeah, they'll be coming back in a matter of time ".

Body recovered from wreckage of Emiliano Sala plane
French top-flight club Nantes is demanding that Cardiff pay the sum of KSh 1.9 billion (£ 15m) transfer fee for Emiliano Sala . The plane flying from Nantes , France to Cardiff on January 21 went missing with Sala and pilot David Ibbotson inside.

Instagram's most famous egg 'hatches'
In a cryptic announcement made through a Hulu episode titled "The Reveal", the true meaning of our lil egg friend was unveiled. The account initially reached out to Mental Health America for the partnership, according to tweets by the nonprofit.

Titanfall devs release Apex Legends free-to-play battle royale
Respawning in Apex Legends can take a while and respawned players will not have any gear or weapons when they return to the game. Cross-play is not supported at the moment, though Respawn Entertainment and EA left the door open on that as well.

Google parent’s fourth-quarter revenue, profit beat estimates
Chief Executive Sundar Pichai (pictured) has said only that it's a billion-dollar-a-quarter business, and that was a year ago. Pichai said Google's cloud computing unit previous year doubled the number of deals it struck worth more than $1 million.

USA measles outbreak could be prevented
It starts with a fever, runny nose, cough, red eyes and sore throat, and is followed by a blotchy rash. Doctors say a big reason for measles spreading is the rate which patients are not getting the vaccine.

Why Trump invited these particular Americans to the State of the Union
He pushed his party into a lengthy government shutdown over border security, only to cave to Democrats. The president will deliver the belated annual address before a joint session of Congress at 9 p.m.

Netherlands recognises Guadio as Venezuelan leader after deadline expires
Guaido repeatedly has called on Venezuela's military , which has remained loyal to Maduro, to support a transition to democracy. The European countries urged Guaido to hold free and fair elections as soon as possible.

Ander Herrera says Manchester United need to focus ahead of momentous month
Leicester have won just four home league games this season and sit 11th, six points behind Wolves in seventh. But Ben Chilwell has asked the Foxes faithful to trust Puel.

Kylie Jenner Threw The Most Adorable First Birthday Party For Stormi
While the two have not confirmed their engagement, it's become clear to fans that Jenner is having fun fueling the rumours. Though the location was not disclosed, many can guess that Kylie Jenner was spending her time somewhere luxuroious.

Nissan's real Brexit problems have not yet started
Meanwhile, a government minister has said Nissan will still get its money. Cable said. "It's actually self-harming and they should just stop".

Pablo Zabaleta targets Liverpool scalp to boost Europa League hopes
Liverpool's advantage still stands at a healthy five points , however, with just 14 games left to play. We go game by game and our mentality has to be to stay until the end of the season in first place.