FOURTH BI-MONTHLY MONETARY POLICY STATEMENT, 2019-20

Oct. 5, 2019

The Monetary Policy Committee of the RBI has cut the key policy rate by 25 basis point to 5.15 %.

Key highlights of Monetary Policy Statement:

On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) has decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 5.15 % from 5.40 % with immediate effect.
Consequently, the reverse repo rate under the LAF stands reduced to 4.90 %, and the marginal standing facility (MSF) rate and the Bank Rate to 5.40 %.
The MPC also decided to continue with an accommodative stance as long as it is necessary to revive growth, while ensuring that inflation remains within the target.
It also revised its growth forecast for the current financial sharply, from 6.9% projected in the August policy, to 6.1%. Growth forecast for the first quarter of the next financial year was also trimmed to 7.2% from 7.4%.
These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 % within a band of +/- 2 %, while supporting growth.

Source : The Hindu