The six-member Monetary Policy Committee (MPC) leaded by the RBI governor Urjit Patel presented its first bi-monthly monetary policy review 2018-19 by keeping the repo rate, cash reserve ratio and repo rate unchanged.The meeting was started on Wednesday and concluded today by keeping the majority rate same as before.
Repo rate was kept at 6 per cent and cash reserve ratio at 4 per cent while reverse repo rate was kept unchanged at 5.75 per cent.However, the benchmark lending rate gets reduced from 6.25% to 6.00% thereby making its 6-year low.
The five members of MPC committee, Urjit Patel, Ravinder Dholakia, Pami Dua, Chetan Ghate and Viral Acharya were in favour of the policy rates while Michael patra voted for the increase in the policy rates to 25 basis points.
The inflation rate was projected at 4.5 percent in Q4 for FY18 while 4.4-4.7 percent for FY19 for H1 and 4.4 percent for H2.
The revised rates for minimum support price in the Union Budget for kharif crops will definitely affect the inflation rates although the real rates will be known only in the coming months.
The RBI statement said, “With the sharp moderation in food prices in February-March, the inflation trajectory in H1:2018-19 is expected to be lower than the projection in the February statement, despite a likely reversal in food prices in H1”.