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On the basis of an assessment of the current and evolving macroeconomic situation, the six-member committee headed by RBI Governor, Mr. Urjit Patel in its meeting decided to:

  1. Keep the policy repo rate under the Liquidity Adjustment Facility (LAF) unchanged at 6.5%.
  2. The Revenue Repo rate under LAF remains at 6.25%.
  3. No changes were made to the Cash Reserve Ratio (CRR) which will continue to be 4%.
  4. Statutory Liquidity Ratio (SLR) is cut by 25 basis points.
  5. Consequently, the Marginal Standing Facility and bank rate are at 6.75% with the objective of achieving the medium-term target for Consumer Price Index (CPI) inflation of 4% within a band of +/- 2% while supporting growth.
  6. RBI has maintained “Calibrated Tightening” of monetary policy and based on overall assessment GDP for 2018-19 has been projected at 7.4% as in the October policy and for 2019-20, GDP is quoted at 7.5%, risks being somewhat down sided.

Note: Calibrated tightening – unless needed, interest rates are not changed for every meeting.

Post Author: Sruthi Poduri

Sruthi Poduri works as a Senior Officer in ICICI Bank. She is interested in Banking Laws and is well updated with the recent developments like regulations, guidelines, circulars, notifications etc. issued by RBI. The author can be reached at shrutipoduri@gmail.com.

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