RBI monetary policy review of 2017-18: Key highlights

RBI left its benchmark lending rate unchanged at 6.25 percent for the third policy review in a row citing upside risk to inflation.

New Delhi: The Reserve Bank left its benchmark lending rate unchanged at 6.25 percent on Thursday for the third policy review in a row citing upside risk to inflation.

It however increased the reverse repo rate at which it pays to lenders by 0.25 percent to 6 percent, narrowing the policy rate corridor.

Following are the highlights of the first bi-monthly monetary policy for 2017-18 as announced by RBI

• *Policy repo rate unchanged at 6.25%, hikes reverse repo to 6%
• *Narrows policy rates corridor due to increased liquidity, post demonetisation
• *Pegs GVA growth for current fiscal at 7.4% as against 6.7% last year
• *Revises MSF, bank rate to 6.5%
• *Retail inflation in first half seen at 4.5%, 5% in second half
• *Economic indicators point to modest improvement in? microeconomic outlook
• *Risk evenly balanced around inflation trajectory; upside risk from uncertainty about monsoon
• *Upside risk to inflation from GST, poor monsoon, pay commission award
• *Further scope for a more complete transmission of policy rates remains, including for small savings rates
• *All six MPC members voted in favour of RBI monetary policy
• *The next meeting of the Monetary Policy Committee on June 5 and 6.