Repo Rate Increased By 25 Bps In Second Bi-Monthly Monetary Policy Statement (2018-19)

The RBI on 06 June 2018 hiked its key short-term lending rate by 25 basis points (bps) to 6.25 percent at its second bi-monthly monetary policy review of the ongoing fiscal. All six members of the Monetary Policy Committee (MPC) including RBI Governor Urjit Patel voted for a 0.25 percent repo rate hike.

Earlier, in four previous policy reviews, the Reserve Bank of India’s (RBI) six-member Monetary Policy Committee (MPC) left the repo, or short-term interest rate for commercial banks, unchanged at 6 percent. Second Bi-monthly Monetary Policy Statement, 2018-19 – Resolution of the Monetary Policy Committee (MPC), Reserve Bank of India

On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to: increase the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 6.25 percent.

Consequently, the reverse repo rate under the LAF stands adjusted to 6.0 percent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.50 percent.

The decision of the MPC is consistent with the neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 percent within a band of +/- 2 percent, while supporting growth. The main considerations underlying the decision are set out in the statement below.

Translate »