Sinking day by day to an all-time low, Rupee has crossed the unbelievable mark of 74 against US Dollar on Friday thus creating a massive disturbance in the stock market. Meanwhile, the RBI has announced its fourth bi-monthly policy rates today thus surprising everyone for the unchanged Repo Rate.
The repo rate at which RBI lends money to the commercial banks was expected to be increased by 25 basis points or 0.25% but it is kept still at 6.5% as against raised on August and July this year.
The five-panel committee headed by RBI governor Urjit Patel voted majority by 4:1 to keep the repo rate unchanged. Followed by the steep rise in the International crude oil prices, the inflation concerns are prevailing hence tightening liquidity in the system.
Along with the RBI Policy, MPC was projected to an inflation of 4% during the September quarter while the GDP growth rate was estimated at 7.4%. for the fiscal ending in March 2019.
While some of the analysts were disappointed with RBI’s move, others welcomed the move by saying that “It’s good that they (RBI) have not raised the rate. It is the time to wait and see”.
However, the government move to cut the fuel prices yesterday by Rs 2.5 has also comforted the RBI on the inflation side.