INSUBCONTINENT EXCLUSIVE:
NEW DELHI: The six-member monetary policy committee of RBI headed by Governor Urjit Patel on Wednesday bit the bullet and hiked the
four-and-a -half years, since the BJP-led National Democratic Alliance government was vo ted into office in May 2014
The reverse repo rate has been adjusted to 6 per cent.
The RBI allowed 2 per cent more SLR (statutory liquidity ratio) carve out to meet
The banks can now use SLR carve out of 13 per cent to meet liquidity cover ratio
Eighty-three per cent of the economists who participated in an ETNow poll had expected a 'hawkish' stance while the remaining 17 per cent
per cent as in the April policy
GDP growth is projected in the range of 7.5-7.6 per cent in H1 and 7.3-7.4 per cent in H2, with risks evenly balanced.
"The MPC notes that
domestic economic activity has exhibited sustained revival in recent quarters and the output gap has almost closed
Investment activity, in particular, is recovering well and could receive a further boost from swift resolution of distressed sectors of the
economy under the Insolvency and Bankruptcy Code," RBI said.
Geo-political risks, global financial market volatility and the threat of trade
protectionism pose headwinds to the domestic recovery
It is important that public finances do not crowd out private sector investment activity at this crucial juncture
inflation outlook considerably, the MPC statement read.
Money markets were expecting rates to rise
two-year high.
The rate hike is expected to trigger a spike in bond yields, thus raising further inflation risks.
This is the first time the
Two members had voted for a 25-basis points hike at the April rate review.
Much water has flowed below the bridge since
A recent spike in crude prices has upset inflation calculations
account and threatening to stoke consumer prices further
retail price gauge, was at 4.58 per cent in April, up from 4.28 per cent a month earlier
cent probability of a pre-emptive 25 basis point hike this time around
Indonesia, which has a large population and runs a high current account deficit (CAD), just like India, hiked interest rates twice in the
and CAD to GDP ratios could make it vulnerable to the negative sentiment seen in other emerging markets
India's low external debt to GDP ratio and high import cover may act as a buffer
