RBI forms group to improve marginal cost of lending rate system

Consumer price inflation fell to a record 1.5% in June adding pressure on the RBI to change the neutral stance it adopted five months ago

India's central bank Wednesday cut its repo rate by 25 basis points to a seven-year low of 6 percent.

As the trajectory of inflation in the baseline projection is expected to rise from current lows, the MPC made a decision to keep the policy stance neutral and to watch incoming data.

The monetary policy statement was arrived after a two- day meeting of the MPC headed by RBI Governor Urjit Patel.

The MPC also noted that inflation is well below target in most of advanced and emerging market economies despite a modest rise in global demand as well as uptick in crude oil.

The rate cut was in line with market expectations. These banks can keep their lending rate higher than the rate they borrow money from the RBI. However, it seems that the governor wants to look closely at the impact of the recent economic policies before trimming rates further. Despite a cut in the benchmark lending rate, RBI retained its GDP forecast to 7.3 per cent. The central bank had last cut key rates in October 2016.

Trump's tax plan has aggressive timeline but no details
But finding agreement on tax reform is notoriously hard . "We respect the process in the House and the Senate and the committees to get that done".

The Reserve Bank decision to slash repo rate by 25 basis points to 6 per cent will perk up the market sentiments and enable a gradual recovery in credit cycle, bankers and analysts said.

Finance Minister Arun Jaitley called for a reduction in the key policy rate in June after retail inflation fell sharply from 2.18 percent to 1.54 percent - the lowest since the government started tracking it in its current form in 2012. The repo rate, at which RBI lends to banks, is now down to 6 per cent, the lowest in more than six years.

Giving us a better understanding on the way this rate cut will affect the automotive industry was Abdul Majeed, Partner Price Waterhouse said, "The RBIs 25 basis points cut in the report rate is a good move". Ratings firm Crisil said, "Despite a rate cut, the MPC s policy stance has been kept neutral given the expected uptick in inflation". "I think, we need a time-bound, single window clearance by state governments of this very important initiative, which has the potential for growth", said Patel.

Deepak Kapoor, President CREDAI-Western UP & Director, Gulshan Homz: The realty sector welcomes the repo rate cut by RBI today which is further expected to fuel the demand as the EMIs are expected to fall even more.

As per RBI projections, CPI inflation is expected to be around 4 percent in the March 2018 excluding the effect of increase in HRA of central government employees.

Related News:

  • Trump's approval rating hits new low

    Trump's approval rating hits new low

    Another interesting takeaway from this poll is the how much the public really wants the president to stop tweeting . Democrats hold a whopping 61 percent disapproval rating among these voters, with only 32 percent approving.
    Eurozone manufacturing PMI cools on reduced output, orders

    Eurozone manufacturing PMI cools on reduced output, orders

    The French factory PMI rose marginally to 54.9 from 54.8 in June, but the score was well below the flash 55.4. UK Manufacturing PMI: it is known that the manufacturing and services sectors are the drivers for UK economy.
    US Vice President: 'Georgia is our main strategic partner'

    US Vice President: 'Georgia is our main strategic partner'

    Georgia's PM stressed that Georgia-US soldiers stood shoulder-to-shoulder against extremism in worldwide peacekeeping missions. Vice President Mike Pence on Sunday assured USA commitment to the Baltic states in the face of Russian aggression.
  • Australian NBL clubs to prepare the National Basketball Association  for 2017-18 season

    Australian NBL clubs to prepare the National Basketball Association for 2017-18 season

    That group featured Andrew Bogut, Patty Mills , Ben Simmons, Matthew Dellavedova, Aron Baynes, Thon Maker, Exum and Ingles. The Brisbane Bullets will visit the Phoenix Suns at Talking Stick Resort Arena on October 13.
    China opens its first army base overseas

    China opens its first army base overseas

    India and China are locked in a massive standoff at the border in Sikkim, the longest between the two countries since the 1962 war.
    'The Bachelorette' recap: The Men Tell All, and call out Lee

    'The Bachelorette' recap: The Men Tell All, and call out Lee

    It seems like a lifetime ago when DeMario Jackson was caught having ghosted his girlfriend in order to go onto the Bachelorette . After hearing this, it was a surprise to hear that Lindsay chose Unglert to be eliminated next on the show.
  • Apple defends complying with China over VPNs

    Apple defends complying with China over VPNs

    Chinese internet enthusiasts have been faced with massive restrictions on many web based activities, such as Twitter and Facebook. Unlike in Russia, VPNs are still available in China but they require a license from the government.
    Apple Earnings Push Stock Market to New Record High

    Apple Earnings Push Stock Market to New Record High

    On Friday the official non-farm payroll numbers are forecast to show a 180,000 increase, down from June's figure of 187,000. The S&P 500 however is down nearly two points at 2,474, while the tech heavy Nasdaq index shed 4.30 to at stand at 6,358.
    Trump 'White Discrimination' Probe at Colleges Planned

    Trump 'White Discrimination' Probe at Colleges Planned

    The Supreme Court past year upheld a University of Texas program that considers race, among other factors, in admissions, offering a narrow victory for affirmative action .
  • WWE SmackDown results: Jinder Mahal's SummerSlam opponent determined

    WWE SmackDown results: Jinder Mahal's SummerSlam opponent determined

    Seemingly blinded, the referee still counted to three and declared Styles the victor despite Owens having his shoulder up. Of course, a dream match in itself, something the WWE fans both in India and across the world would have enjoyed.
    Teen Arrested After Jumping Off Copa Airlines Flight, Other Similar Incidents

    Teen Arrested After Jumping Off Copa Airlines Flight, Other Similar Incidents

    S. citizen, was traveling alone on the Copa Airlines Flight 208 from Panama City headed to San Fransisco, reports AP. Passengers said there was a big commotion when they noticed one of the exit doors was wide open.
    South is gearing up for National Night Out

    South is gearing up for National Night Out

    Middleton said she plans to attend four community gatherings, including events in Forest Park and Chelsea Terrace. In most communities, they were mostly "lights on" vigils with some basic information given to the community.


Most liked

Ravens Deny Owner is Blocking Colin Kaepernick Signing
I'll frame that this way: "there are other positions that we're looking at too and I don't have any updates on those either". Many have attributed his unemployment to his decision to kneel for the national anthem ahead of games last season.

Inmates who escaped Alabama jail used peanut butter to trick new hire
As of Tuesday morning, Brady Andrew Kilpatrick, 24, is the last remaining escapee from the Walker County Jail. Underwood concluded that the prison facility was in need of improvements such as more cameras and monitors.

Microsoft Announces Surface Plus For Business Program
It's unclear how much money people will save through the upgrade because it depends on the kind of Surface device involved. With school starting soon, there's never been a better time for students to find the best Surface that's right for them.