Press Esc to close

No cheap housing, car loans for now as RBI keeps interest rates on hold

New Delhi, DH News Service Dec 6 2017, 21:50 IST
The Reserve Bank of India (RBI) Governor Urjit Patel attends a news conference after the bi-monthly monetary policy review in Mumbai, India, December 6, 2017.

The Reserve Bank of India (RBI) Governor Urjit Patel attends a news conference after the bi-monthly monetary policy review in Mumbai, India, December 6, 2017.

The Reserve Bank of India (RBI) on Wednesday maintained a status quo on key interest rates but raised inflation forecast for the remaining period of the current fiscal and cautioned that the recent duty roll back on petrol and diesel and GST rate cuts could result in a fiscal slippage.

The 6-member Monetary Policy Committee (MPC) headed by RBI Governor Urjit Patel decided to keep the repo rate unchanged at 6%, the reverse repo at 5.57% after inflation rose to a seven-month high in October. It raised the inflation forecast to 4.3%-4.7% for the period till March 31, 2018. However, the economic growth forecast was kept unchanged at 6.7% for the financial year 2017-18.

Repo rate is the rate at which the RBI lends money to commercial banks.

The MPC also cautioned that going forward, the non-food, non-fuel or core inflation was expected to be sticky and therefore maintained a neutral stance on the future rate cuts, implying that future decision on rates will depend on the data flow in coming quarters.

Wednesday's decision was more or less on the expected lines as almost all macro-economic indicators leading to the monetary policy review €“ crude oil and commodity prices, retail inflation and the government's fiscal situation -- pointed towards a negative.

Economists said, the RBI may go in for a pause in rates in the foreseeable future as November and December inflation rates were seen inching up on the back of farm loan waiver and the upward revision in HRA impact. The recent GST rate cuts on several items were also seen inflationary.

Even as the MPC raised inflation forecast for third and fourth quarters, it said it was committed to keeping the retail inflation close to 4% on a durable basis.

The next monetary policy review will be on February 7.

Go to Top

More from this section
Most trending stories
Photo Gallery
Prime Minister Narendra Modi addresses the media on the first day of the winter session...

Prime Minister Narendra Modi addresses the media on the first day of the winter session...

Outgoing Congress president Sonia Gandhi, former prime minister Manmohan Singh, Congress...

Outgoing Congress president Sonia Gandhi, former prime minister Manmohan Singh, Congress...

INLD MP Dushyant Chautala arrives by a tractor to attend the winter session of Parliament...

INLD MP Dushyant Chautala arrives by a tractor to attend the winter session of Parliament...

Social activist Anna Hazare while addressing a press conference at the Guwahati Press club, in...

Social activist Anna Hazare while addressing a press conference at the Guwahati Press club, in...

Members of Anganwadi workers hold a protest against Uttar Pradesh Government in support of their...

Members of Anganwadi workers hold a protest against Uttar Pradesh Government in support of their...

Election observers inspecting the EVM (Electronic Voting Machines) at a distribution centre...

Election observers inspecting the EVM (Electronic Voting Machines) at a distribution centre...

A vegetable vendor sits between the wheels of a parked truck, in a street market in Kolkata on...

A vegetable vendor sits between the wheels of a parked truck, in a street market in Kolkata on...

Army jawans near a helicopter parked at Kolkata maidan during foggy Friday morning. Historic Victori

Army jawans near a helicopter parked at Kolkata maidan during foggy Friday morning. Historic Victori

A fisherman casting his net at Dal Lake during a cold winter morning, in Srinagar on...

A fisherman casting his net at Dal Lake during a cold winter morning, in Srinagar on...

Muslims pray on the steps of a mosque during a demonstration against the...

Muslims pray on the steps of a mosque during a demonstration against the...

Like us on Facebook

Copyright 2017, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bengaluru - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523
Powered by Yodasoft Technologies Pvt. Ltd.