INSUBCONTINENT EXCLUSIVE:
NEW DELHI: RBI's monetary policy committee (MPC), led by Governor Shaktikanta Das, on Thursday announced a 25 basis points cut in the
short-term lending rate, also known as repo or repurchase rate, in its first bi-monthly rate review of financial year 2019-20
The repo rate now stands at 6 per cent
This was the second back-to-back rate cut by the six-member MPC ever since Das was appointed Governor
Fiscal situation at the government level needs a close monitoring
voted 4:2 in favour of the rate cut
Pami Dua, Ravindra Dholakia, Michael Debabrata Patra and Shaktikanta Das voted in favour of the decision to reduce the policy repo rate
per cent from 7.4%CPI inflation target revised downward to 2.4% from 3%RBI took note of headwinds to Indian economyMPC votes 4-2 in favour
of 25 bps rate cutMPC votes 5-1 to keep stance unchanged at 'neutral'MPC's Ghate, Viral Acharya voted for status quoLow Jan-Feb food
inflation to have bearing on near-term CPITo form task force on secondary market for corp loans, Das said Fiscal situation at govt level
The central bank sees inflation rising to 3.5-3.8 per cent in the second half, with risks evenly balanced.
The rate cut was in line with
analysts projections in an ET Now survey, where 90 per cent of the respondents hoped for a 25-basis point rate cut, while the rest has
India's retail inflation for January-February averaged at 2.3 per cent, lower than RBI's inflation forecast of 2.8 per cent for March
quarter.
Domestic equity benchmark was benign in its reaction to the RBI move
BSE Sensex traded 50 points down at 38,820
The rupee extended its weakness and was down 43 paise at 68.87
The 10-year bond yield stood at 7.3, up 0.4 per cent.
Analysts said the transmission of the previous rate cut in February did not
materialise as liquidity remained tight
adopted a very sensible and pragmatic approach
It took cognizance of the likelihood or potential for inflationary pressures emerging from food prices and fuel prices , and also fiscal
supporting economic growth under Governor Shaktikanta Das, with inflation under control, is evident, said Amar Ambani, President Head of
Research at YES Securities
Ahead of RBI policy outcome, Ambani however, felt RBI should focus solely on addressing the liquidity situation in the economy.
MPC voted
5-1 to keep stance unchanged at 'neutral'
Chetan Ghate, Pami Dua, Michael Debabrata Patra, Viral Acharya and Shri Shaktikanta Das voted in favour of the decision to maintain the
neutral stance of monetary policy
The next meeting is scheduled from June 3 to 6.
