RBI likely to keep repo rate unchanged in first bi-monthly monetary policy for FY19

The Central Bank is set to announce its monetary policy at 2.30 pm on Thursday.

RBI likely to keep repo rate unchanged in first bi-monthly monetary policy for FY19

New Delhi: RBI will on Thursday make public the resolution of the Monetary Policy Committee (MPC) on its first bi-monthly monetary policy for the new fiscal, 2018-19.

The Central Bank is set to announce its monetary policy at 2.30 pm on Thursday.

The MPC, headed by RBI Governor Urjit Patel, started its 2-day meeting on Wednesday amid little hope of cut in the key policy rate.

RBI has maintained a pause on the key short-term borrowing rate (repo) in its last three policy meets. The benchmark lending rate was reduced by 0.25 percentage points to 6 per cent last August, bringing it to a 6-year low.

Official data has revealed that retail inflation based on the Consumer Price Index (CPI) in February fell to 4.44 percent, from 5.07 percent in January, but remained outside the RBI medium-term target of 4 percent.

Experts also believe that the central bank will have to do a tightrope walk and be mindful of the pace of India`s economic recovery as banks are likely to go slow on lending after a loan-fraud scandal worth over Rs 13,000 crore at the country`s second largest state lender Punjab National Bank.

That could slow down activity after India grew the fastest in five quarters at 7.2 percent.

At its February meeting, the five members of the Monetary Policy Committee (MPC) , including the three external ones and the Governor, voted in favour of the decision, while RBI Executive Director Michael Patra voted for an increase in the policy rate by 25 basis points.

With Agency Inputs

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