Bookmark Kaumudi Online  Bookmark this site  Editor@Kaumudi  |  Marketing  Print Advt rates  |  Calendar 2012        Go!    
 
 
April 23, Sunday 2017 11:24 PM       

       HEADLINES: Woman, three daughters mowed down by train                                              Vengara bypolls will decide who is ‘right’, says Joy Mathew                                              Money power and Power Mani behind Munnar encroachment, says Kummanam                                              KRK says sorry for comparing Mohanlal to ‘Chota Bheem’                                              M M Mani is shame for state, says Sudheeran                                              TN CM meets protesting farmers in Delhi                                              ISRO to increase launch frequency to 12 per year                                              Mega defence deals likely during PM's trip to Israel                                              Modi to address all BJP CMs today                                              TN farmers suspend protest after CM's assurance                                              Pakistani man eats leaves for 25 years, never falls ill: Report                                              PPP to launch movement for Sharif's resignation                                              US accuses TCS, Infosys of violating H-1B visa norms                                              It is sad that India is no. 3 in doping: Mary Kom                                              Dhoni seals 6-wkt victory for Pune against Hyderabad                                              Bowlers deliver win for Mumbai                                              No required rate too high if you keep calm: Dhoni                                              Bopanna-Cuevas pair wins Monte Carlo Masters                                              Kaumudi Facebook
       BUSINESS Next Article: India to grow at 7.4% in FY18 on reforms,consumption boost: ADB  
       RBI retains key rate at 6.25%; ups reverse repo, cuts MSF
 
         Posted on :21:49:12 Apr 6, 2017
   
A A
       Last edited on:21:49:12 Apr 6, 2017
         Tags: RBI retains key rate at 6.25%; ups reverse re
 
MUMBAI: The Reserve Bank left its benchmark lending rate unchanged at 6.25 per cent for the third monetary policy review in a row today citing upside risk to inflation.
 
RBI however increased the reverse repo rate -- which it pays to banks for parking funds with it -- by 0.25 per cent to 6 per cent, narrowing the policy rate corridor.
 
The Marginal Standing Facility, on the other hand, has been revised downwards by 0.25 per cent to 6.5 per cent. MSF is RBI's lending rate for banks against government securities.
 
RBI said in its first bi-monthly monetary policy review of 2017-18 that given the upside risks to inflation and excess liquidity in the system, the repo rate -- at which it lends to banks -- has been retained at 6.25 per cent.
 
The central bank said the policy decisions are unanimous. On the gross value add (GVA) basis, RBI sees the economy accelerating to 7.4 per cent in the current fiscal, up from 6.7 per cent in 2016-17.
 
The monetary authority however said it is worried on three fronts with regard to inflation as well as the economy. The first stems from a possible El Nino impact on the monsoon.
 
"The main one stems from the uncertainty surrounding the outcome of the south west monsoon in view of the rising probability of an El Niño event around July-August, and its implications for food inflation," it said.
 
The second worry arises from the GST implementation, while the third upside risks to inflation comes from the 7th pay commission award, according to the Monetary Policy Committee.
 
"For 2017-18, inflation is projected to average 4.5 per cent in the first half and 5 per cent in the second half," the RBI said.
 
It further said that in case the increase in house rent allowance as recommended by the 7th CPC is awarded, it will push up the baseline trajectory by an estimated 100-150 basis points over a period of 12-18 months.
 
"Another upside risk arises from the one-off effects of the GST. The general government deficit, which is high by international comparison, poses yet another risk for the path of inflation, which is likely to be exacerbated by farm loan waivers," the policy review said.
 
On the downside factors, it said, international crude prices have been easing recently and their pass-through to domestic prices of petroleum products should alleviate pressure on headline inflation.
 
Also, it added, stepped-up procurement operations in the wake of the record production of foodgrains will rebuild buffer stocks and mitigate food price stress. On growth RBI said: "The GVA growth is projected to strengthen to 7.4 per cent in 2017-18 from 6.7 per cent in 2016-17, with risks evenly balanced."
 
It said that with progressive remonetisation, the surplus liquidity in the banking system has declined from a peak of Rs 7,956 billion on January 4, to an average of Rs 6,014 billion in February and further down to Rs 4,806 billion in March.
 
Currency in circulation expanded steadily during this period. Its impact on the liquidity overhang was, however, partly offset by a significant decline in cash balances of government up to mid-March which released liquidity into the system.
 
Government cash balances on account of advance tax payments and balance sheet adjustment by banks reduced surplus liquidity to Rs 3,141 billion by end-March.
A A
       BUSINESS
Next Article: India to grow at 7.4% in FY18 on reforms,consumption boost: ADB
 
 
BUSINESS HEADLINES
Thailand expects 12 lakh tourists from India in 2017  
GST great illustration of cooperative federalism: Modi  
Niti Aayog lists promoting digi-payments as achievement  
Hero Cycles eyes setting up Rs 400 cr project  
Impact of demonetisation abated: IMF  
Mistry appeals against NCLT rejecting waiver plea in Tata case  
Air India lowers age limit for elderly travel concession  
SEBI court quashes non-bailable warrant against Sahara chief  
India needs to accelerate investment in children, education:WB  
Sensex extends gains, up 86 pts on bargain hunting  
Jaitley may take up H-1B visa issue with US authorities  
'India moving forward to become major destination for FDI'  
Sensex surrenders early gains, falls 95 pts  
Apple, Coke, Airtel among cos pulled up for 143 misleading ads  
Inflation cools to 5.7%, food prices heat up  
Nifty regains 9,200-level in early trade  
SC orders auction of Sahara's Amby Valley  
Railways to export locos, train sets worth Rs. 680 cr to Lanka  
Sensex edges lower by 88 pts on global weakness  
Netizens uninstall Snapdeal app instead of Snapchat  
Petrol price hiked by Rs 1.39 per litre, diesel up by Rs 1.04  
CBEC sanctions Rs 1 cr to each zone for GST outreach  
Markets feel Infosys heat, Sensex dives 182 pts  
Infosys plans Rs 13,000 cr pay-out via buyback, dividend  
Rupee sinks 17 paise to 64.67 on global woes  
 
Do you think Chief Minister Pinarayi Vijayan triggered holy cross row?
yes
 
no
 
don't know
 
 
 
Home Kerala India World Business Sports Sci&Tech Education Automobile CityNews Movies Environment Letters 
© Copyright keralakaumudi Online 2011  |  Reproduction in whole or in part without written permission is prohibited.
Head Office Address: Kaumudi Buildings, Pettah P.O, Trivandrum - 695024, India.
Online queries talk to Deepu Sasidharan, + 91 98472 38959 or Email deepu[at]kaumudi.com
Customer Service -Advertisement Disclaimer Statement   |  Copyright Policy