After the 2nd Bi-monthly Policy, the Reserve bank of India has released RBI’s 3rd Bi-Monthly Monetary Policy 2017- 18 on 2nd August 2017.
The major decision taken by Monetary Policy Committee headed by Dr. Urjit Patel, was 0.25 percent cut in Repo rate, bringing it down to 6 percent from 6.25 percent. This is the lowest in six and a half years since November 2010.
Out of the six members of Monetary Policy Committee, four were in favor of the monetary policy decision, while Dr. Ravindra H. Dholakia voted for a policy rate reduction of 50 basis points and Dr. Michael Debabrata Patra voted for status quo.
Key Changes: Repo Rate cut down by 25 basis point- Check Major Changes here
Based on the assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee decided to make following changes:
Reduces the Repo Rate by 25 basis point.
Reverse Repo Rate cut by 0.25 percent to 5.75 percent from 6 percent.
The marginal standing facility (MSF) rate and the Bank Rate stands at 6.25 per cent.
Cash Reserve Ratio (CRR) remains unchanged at 4%.
Key Rates after Third Bi-Monthly Policy 201-18
|S. No.||Instruments||Past Rates||Current Rates|
|1.||Repo Rate||6.25%||6% (Reduced by 25 basis points)|
|2.||Reverse Repo Rate||6%||5.75% (Reduced by 25 basis points)|
|3.||Cash Reserve Ratio (CRR)||4%||4% (Unchanged)|
|4.||Bank Rate||6.50%||6.25% (Reduced by 25 basis points)|
|5.||Marginal Standing Facility (MSF)||6.50%||6.25% (Reduced by 25 basis points)|
|6.||Statuary Liquidity Ratio (SLR)||20%||20% (Unchanged)|
Get the details of Key Policy Rates- Important Banking Terms!
11 key takeaways from RBI’s third bi-monthly Monetary Policy Statement 2017-18
1. Below are the key highlights of the RBI’s third Bi – Monthly policy 2017-18.
2. The Central Bank (Reserve Bank of India) focused on keeping headline inflation close to 4 percent on durable basis.
3. The growth forecast remains unchanged at 7.3 percent for the current fiscal year.
4. The economy has slowed down through the past five quarters from a high of 9.1% registered in the fourth quarter of fiscal 2016 to a level of 6.1% in the fourth quarter of fiscal 2017.
5. The Forex Reserves stands at USD 392.9 billion as on 28th July 2017.
6. The farm loan waivers may result in fiscal slippages, undermine public spending quality.
7. The current state of Indian Economy and Indian Banking System need to revive private investment, remove infrastructure bottleneck and provide big thrust to PMAY.
8. RBI is working to resolve large NPAs and recapitalize Public Sector banks.
9. The Retail inflation which is led by softening of food prices, fell to a more than five-year low.
10. Some of the risks such as High core inflation (Excluding food and fuel prices), poor rains, adverse impact of Goods and services Act (GST) have not shown up yet.
11. Fuel inflation declined for the second month in succession as international prices of liquefied petroleum gas (LPG) fell and price increases moderated in the case of coke, firewood, and chips.
RBI Calendar for RBI Bi- Monthly Monetary Policy 2017-18
RBI announces six Bi- monthly policies in a year in the months of February, April, June, August, October, and December to decide the monetary rates which affects Indian Economy. Below is the RBI Calendar 2017 for Monetary Policy 2017-18.
|RBI Policy Statement||Date of Release|
|First Bi-monthly Monetary Policy Statement for 2017-18||6th April 2017|
|Second Bi-monthly Monetary Policy Statement for 2017-18||7th June 2017|
|Third Bi-monthly Monetary Policy Statement for 2017-18||2nd August 2017|
|Fourth Bi-monthly Monetary Policy Statement for 2017-18||4th October 2017|
|Fifth Bi-monthly Monetary Policy Statement for 2017-18||7th February 2018|
To be Noted
The Minutes of MPC’s meeting will be published on 16th August 2017.
The next meeting of the MPC is scheduled on 3rd and 4th October 2017
In this article, we have summed up all the details of RBI’s Third Bi-Monthly Monetary Policy Statement 2017-18.
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