RBI Monetary Policy: Committee meet today; repo rate likely to remain unchanged
The Reserve Bank of India (RBI) has kept the repo rate unchanged at 5.15 per cent saying it will continue with the accommodative stance as long as it takes. All the six members of Monetary Policy Committee voted in favour of maintaining the status quo on the interest rate.
RBI also pegged the GDP growth for 2020-21 at 6 per cent as the economy continued to be weak and output gap remained negative.
The Reserve bank has anticipated inflation to remain elevated in short-run while overall, inflation outlook remains highly uncertain.
It is central bank's last monetary policy for the current financial year. Experts have earlier predicted that the RBI will maintain status quo on rates as well as its monetary policy stance and to continue an accommodative stance to support growth.
The six-member Monetary Policy Committee (MPC) kicked off three-day monetary policy meet on Tuesday, 4 February 2020, for its sixth bi-monthly Monetary Policy Statement for 2019-20. The resolution of the MPC will be unveiled at 11.45 AM today, 6 February 2020.
Earlier, the Reserve Bank of India (RBI) in December had kept interest rates unchanged after five consecutive cuts.
Bi-monthly monetary policy's outlook on inflation and economy will be more vital, as the markets are already factoring in that central bank will most likely maintain the status quo on interest rates.
On the economic front, the services sector of the US economy, which accounts for most activity, grew at the fastest pace in six months in January, according to ISM's purchasing manager survey.
Earlier, a government report showed that the US trade deficit fell in 2019 for the first time in six years, reflecting tariff-reduced imports from China, with a 1.7% decline to $616.8 billion in December.
Meanwhile, the RBI monetary policy, scheduled for the day impacted the share markets opening as well, as market benchmark Sensex jumped over 100 points in the opening session on Thursday.
The 30-share BSE index was trading 125.32 points or 0.30 per cent higher at 41,267.98, and the broader NSE advanced 46.20 points, or 0.38 per cent, to 12,135.35.
In the previous session, Sensex ended 0.87 per cent or 353.28 points higher at 41,142.66. While, Nifty rose 109.50 points, or 0.91 per cent, to settle at 12,089.15.
The Indian rupee also opened on a cautious note at 71.22 against the US dollar in opening trade on Thursday, registering a rise of 3 paise over its previous close as investors exercised caution ahead of the RBI's monetary policy outcome.
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