RBI cuts key rate by 25 bps, changes stance to neutral


Team Udayavani, Feb 7, 2019, 6:57 AM IST

Mumbai: The Reserve Bank of India on Thursday cut benchmark interest rate by 0.25 per cent to 6.25 per cent on expectation of inflation staying within its target range, a move that may translate into lower monthly installments for home and other loans.

The central bank also changed its monetary policy stance to ‘neutral’ from the earlier ‘calibrated tightening’, signalling further softening on its approach towards interest rates.

In the first policy review under Governor Shaktikanta Das, the six-member Monetary Policy Committee voted 4:2 in favour of the rate cut, while the decision to change policy stance was unanimous.

The RBI cut its estimates on headline inflation – which cooled off to a 18-month low of 2.2 per cent in December – for the next year, and expects the number to come at 2.8 per cent in March quarter, 3.2-3.4 per cent in first half of next fiscal and 3.9 per cent in third quarter of FY20.

Benchmark interest rate was cut by 0.25 per cent to 6.25 per cent, a move that would result in lower cost of borrowing for the banks that are expected to transmit the same to individuals and corporates.

“Headline inflation is projected to remain soft in the near term, reflecting the current low level of inflation and the benign food inflation outlook,” the MPC resolution said, adding “we need to be watchful of vegetable prices, oil prices, trade tensions, health and education inflation, financial market volatility and monsoon outcomes”.

The rate cut is in consonance of achieving the medium-term objective of maintaining inflation at the 4 per cent level while supporting growth, it said.

Deputy Governor Viral Acharya and another MPC member, Chetan Ghate, voted for status quo in interest rates, while Das and three others voted for a cut in interest rates.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

Sidhu surrenders in a Patiala court in 1988 road rage case

State government orders probe against IAS officer Rohini Sindhuri

RBI to pay Rs 30,307 crore dividend to govt for FY22

Kundapur: 24-year-old woman goes missing, complaint filed

Mangaluru: Man sexually harasses woman, cheats her of Rs 1.5 cr; Arrested

Karnataka mining: SC permits firms to export excavated iron ores

Canadian MP Chandra Arya speaks in Kannada in Parliament


Related Articles More

Markets claw back lost ground amid global rebound; post weekly gains

RBI to pay Rs 30,307 crore dividend to govt for FY22

Sensex dives 1,155 points in early trade amid weak global markets

India better placed to face global challenges and uncertainties: CEA

UK lays out plans for new legislation to tackle post-Brexit Irish protocol

MUST WATCH

SSC Result : Sirsi Governament School Students Achivement

Important Health Tips Must Watch

NEWS BULLETIN 19-05-2022

Storks enjoy agriculture activity

Heavy rain at Shivamogga Road block


Latest Additions

Raj Thackeray unfortunate man, missed opportunity to visit Ayodhya: BJP MP

Markets claw back lost ground amid global rebound; post weekly gains

Pak top election body “de-seats” 25 dissident lawmakers of Imran Khan’s Tehreek-e-Insaf

Delimitation of wards, determination of OBC quota in BBMP be notified within eight weeks: SC

Rajkumar Hirani joins story library The Sourrce as chief creative mentor

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.