The Reserve Bank of India’s monetary policy committee (MPC) on Thursday voted unanimously to raise the reverse repo rate—the rate at which sucks out excess liquidity from the system—by 25 basis points to 6%. The repo rate, however, has been kept unchanged at 6.25%. Here is the full text of the first Bi-monthly monetary policy statement of the Monetary Policy Committee.
First Bi-monthly Monetary Policy Statement, 2017-18
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:
1. Keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25%.
Consequent upon the narrowing of the LAF corridor as elaborated in the accompanying Statement on Developmental and Regulatory Policies, the reverse repo rate under the LAF is at 6.0%, and the marginal standing facility (MSF) rate and the Bank Rate are at 6.50%.
The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth
