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RBI leaves key rate unchanged

It also retained the economic growth estimates for the current fiscal at 6.7 per cent, while raising inflation target marginally at the upper end to 4.7 per cent by March.
PTI
Mumbai | Posted : Dec 7 2017 1:44AM | Updated: Dec 7 2017 12:06AM
RBI leaves key rate unchanged
File Photo

RBI today expectedly kept interest rates unchanged on concerns of a possible price rise but left the door ajar for a rate cut in future.

It also retained the economic growth estimates for the current fiscal at 6.7 per cent, while raising inflation target marginally at the upper end to 4.7 per cent by March.

With five of its six members voting for the status quo, the Monetary Policy Committee, headed by Reserve Bank of India Governor Urjit Patel, for the second straight meeting kept the benchmark repurchase or repo rate at 6 per cent, its lowest since November 2010.

The RBI also kept the reverse repo rate unchanged at 5.75 per cent and left its policy stance "neutral" that may leave door open for a rate change in next meeting in February.

With inflation accelerating to a seven-month high of 3.58 per cent in October, driven by higher food and oil prices, the status quo decision reflected RBI's concern about price pressures that are nearing its medium-term target.

"The MPC remains committed to keeping headline inflation close to 4 per cent on a durable basis," RBI said in the Fifth Bi-Monthly Monetary Policy statement of 2017-18.

It raised inflation forecast to 4.3-4.7 per cent for October-March, from 4.2-4.6 per cent earlier, and noted that food and fuel price-gains edged up last month and risks to government revenue and any global financial instability could stoke inflation.

RBI retained gross value added (GAV) -- key economic growth measure -- at 6.7 per cent for the fiscal year ending March 31.