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Wednesday, 7 June 2017

RBI keeps Repo Rate unchanged in Second Bi-monthly Monetary Policy Statement, 2017-18


On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to:
  • Keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25 per cent.
  • Consequently, the reverse repo rate under the LAF remains at 6.0 per cent, and
  • The Marginal Standing Facility (MSF) rate and the Bank Rate at 6.50 per cent.
The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.

Important Takeaways for IBPS PO Exam-
  • The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934
  • The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937.
  • RBI Act, 1934 has been amended by the Finance Act, 2016, to provide a statutory and institutionalized framework for a Monetary Policy Committee, for maintaining price stability, while keeping in mind the objective of growth. 
  • The primary objective of monetary policy is to maintain price stability while keeping in mind the objective of growth. Price stability is a necessary precondition to sustainable growth.
Source- RBI

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