Reserve Bank Governor Raghuram Rajan has left the key interest rate unchanged at 6.75 per cent citing inflation risks and growth concerns, while pegging further easing of monetary policy on government’s budget proposals.
Below are the highlights from Raghuram Rajan’s speech on monetary policy review
– Repo rate unchanged at 6.75 per cent
– Cash reserve ratio or CRR unchanged at 4 per cent
– Expects inflation to be around 5 per cent by March 2017
– Expects GDP growth of 7.6 per cent for FY17, 7.4 per cent with downward bias for FY16
– Indian economy lost momentum in Q3
– Have not factored in 7th pay panel recommendation in inflation target
– Continue to remain accommodative even if rates remain unchange
– Working with banks and government to ensure identification of stressed assets
– Bearish commodity price dynamics are also likely to impact investor sentiment
– Marginal standing facility rate and Bank Rate at 7.75 pct
– RBI to create a special ecosystem for startup funding
– Prospects for the rabi harvest are improving slowly;
– Policy to remain accommodative if fiscal side helps
– Reforms in Budget to create space for rate cut
– First bi-monthly monetary policy for 2016-17 on April 5
