RBI's Third Bi-Monthly Policy Announced, Repo Rate Unchanged, Raghuram Views

INDORE, India - Aug. 9, 2016 - PRLog -- RBI keeps the repo rate unchanged at 6.50 percent, Raghuram Rajan announced in his last monetary policy on Tuesday. Repo rate is the rate at which the commercial banks borrow from the central bank. This was the second straight money policy review in which the central bank has stood pat on policy rates. It also marked the last policy review by outgoing RBI Governor Raghuram Rajan. Not only this but the CRR has also kept unchanged to 4 percent. CRR is the ratio of deposits which banks have to keep with RBI. Under CRR a certain percentage of the total bank deposits has to be kept in the current account with RBI. RBI told that inflation can cross more than 5 percent and the inflation in pulses and cereals is increasing very fast. The analysis of economic growth for the financial year 2017 has been kept at 7.6 percent. No changes has been made in this. In terms of GST (Goods and Services Tax Bill),  Rajan told that through GST there will be an environment of investment all over the nation. GST rate will be very important and after GST inflation will be increased is not necessary. Looking ahead, the momentum of growth is expected to be quickened by a normal monsoon, raising agricultural growth and rural demand," RBI said. The central bank expects disbursement of payment under the 7th Pay Commission to further aid growth by giving consumer demand a push. A stimulus to consumption spending can be expected from the disbursement of pay, pension and arrears following the implementation of the 7th CPC's award," RBI said. It maintained its 7.6 per cent GVA growth target for March 2017.

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