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:
- Keep the policy repo rate under the Liquidity Adjustment Facility (LAF) unchanged at 6.5%.
- The Revenue Repo rate under LAF remains at 6.25%.
- No changes were made to the Cash Reserve Ratio (CRR) which will continue to be 4%.
- Statutory Liquidity Ratio (SLR) is cut by 25 basis points.
- 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.
- 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.