RBI keeps rates steady |
The Reserve Bank of India (RBI) has on Feb 7, 2018, kept the key policy rate unchanged at 6 per cent for the third consecutive time, stating that “inflation outlook is clouded by several uncertainties on the upside” and “fiscal slippage as indicated in the Union Budget could impinge on the inflation outlook”. While the Monetary Policy Committee (MPC), in its bi-monthly monetary policy review, reiterated its commitment to keep headline inflation close to 4 per cent on a durable basis, it has projected inflation at 5.1-5.6 per cent in the first half before moderating to 4.5-4.6 per cent in the second half with upside risks. The monetary policy was far less hawkish than expectations, implying that unless things go really awry — particularly in the crude oil market or the domestic fiscal policy — and push inflation way above the projected trajectory, the RBI could stay on hold in the near term.
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