RBI policy review: Reverse repo rate raised to 6%, repo rate unchanged

RBI policy review will take place at 2:30 pm

BS Web Team | New Delhi April 6, 2017 Last Updated at 16:24 IST

Reserve Bank of India

The Reserve Bank of India has kept the repo rate unchanged at 6.25 per cent. However, the Reverse Repo Rate has been raised to 6 per cent. Cash Reserve Ratio has remained unchanged at 4 per cent.

Marginal Standing Facility Rate cut by 25 basis points. Now it stands at 6.5 per cent. GVA growth is projected to be 7.4 per cent in 2017-18 as compared to 6.7 per cent in 2016-17.

D K Srivastava, chief policy advisor, Ernst And Young says, "This is along expected lines. Repo rate has not been changed because there is an upward risk to inflation that is being anticipated, while growth appears to be turning positive in RBI's view. They are basically focused on inflation. The main thing is that neutral stance is being maintained."

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4:11 PM

Chakri Lokapriya, MD & CIO, TCG AMC, says "Reverse Repo increased to 6 per cent is incrementally positive for banks. Importantly, RBI has announced that banks can start to invest in REITs, which is a positive measure for both banks and real estate developers. For banks it offers an additional important asset class for investing and brings liquidity. For commercial real estate companies, it brings in liquidity, and frees up capital which lowers their cost of capital."

4:10 PM ALSO READ: 5 key takeaways from RBI's first bi-monthly policy statement, 2017-18

4:08 PM D K Srivastava, chief policy advisor, Ernst And Young says, "This is along expected lines. Repo rate has not been changed because there is an upward risk to inflation that is being anticipated, while growth appears to be turning positive in RBI's view. They are basically focused on inflation. The main thing is that neutral stance is being maintained."

3:32 PM Urjit Patel says currently, shift from accommodative to neutral is adequate

3:20 PM Farm loan waiver undermines honest credit culture and entails transfer of taxpayers' money: RBI chief Urjit Patel

3:05 PM We need to have consensus that loan waiver promises are eschewed: Urjit Patel

3:00 PM A pilot project is being launched by RBI for financial literacy in the country: RBI

2:59 PM The pace of remonetisation will continue to trigger a rebound in discretionary consumer spending: RBI

2:57 PM The various indicators of stressed assets have further deteriorated

2:56 PM CPI inflation set to undershoot 5 per cent target for Jan-March: Urjit Patel

2:55 PM We will soon announce measures to deal with stressed balance sheets and it will lead us to the path of healthy banking: Urjit Patel

2:53 PM RBI is focused on removing the liquidity overhang in the system: Urjit Patel

2:53 PM There was surge in liquidity in system after demonetisation which RBI had to absorb: Governor Urjit Patel

2:53 PM RBI has employed various methods to soak up liquidity: Urjit Patel

2:52 PM Monetary Policy Committee decided unanimously to keep rates unchanged: Urjit Patel

2:52 PM RBI has employed various methods to soak up liquidity: Urjit Patel

2:51 PM Policy decision was a unanimous call by the Monetary Policy Committee

2:40 PM RBI sets inflation target at 4.5 per cent for H1 of FY18 and 5 per cent for H2 of FY18.

2:40 PM Cash Reserve Ratio (CRR) remains unchanged at 4 per cent.

2:37 PM GVA growth is projected to be 7.4 per cent in 2017-18 as compared to 6.7 per cent in 2016-17, says RBI

2:36 PM Marginal Standing Facility Rate cut by 25 basis points. Now it stands at 6.5 per cent

2:31 PM Reverse repo rate raised to 6 per cent from 5.75 per cent

2:30 PM RBI keeps repo rate unchanged at 6.25%

2:25 PM Repo rate: is 6.25 per cent now, while the RBI has changed its stance to 'neutral' from 'accommodative'

1:46 PM Special deposit facility: Economists expect creation of non-collateralised liquidity parking instrument in this policy

1:40 PM Economists say: uncertain monsoon can flare up prices. So RBI would likely wait before deciding the way for rates to go

1:34 PM Now that US Federal Reserve has signalled that at least two more rate hikes will ensue in 2017, market participants will look for RBI's take on the same.

1:27 PM

The market has been eagerly waiting for the government and RBI’s announcement on a speedy resolution to the banks' non-performing assets (NPAs) ever since Finance Minister Arun Jaitley announced that Finmin is working in close consultation with RBI to arrive at a solution.

1:03 PM ALSO READ: RBI policy review: Amid focus on cash control, rate to remain unchanged

12:58 PM Market experts expect the central bank to introduce measures to squeeze excess liquidity out of the banking system and deal with banks’ bad loan woes.