RBI cuts key rate by 25 bps, changes stance to neutral
Team Udayavani, Feb 7, 2019, 6:57 AM IST
Mumbai: The Reserve Bank of India on Thursday cut benchmark interest rate by 0.25 per cent to 6.25 per cent on expectation of inflation staying within its target range, a move that may translate into lower monthly installments for home and other loans.
The central bank also changed its monetary policy stance to ‘neutral’ from the earlier ‘calibrated tightening’, signalling further softening on its approach towards interest rates.
In the first policy review under Governor Shaktikanta Das, the six-member Monetary Policy Committee voted 4:2 in favour of the rate cut, while the decision to change policy stance was unanimous.
The RBI cut its estimates on headline inflation – which cooled off to a 18-month low of 2.2 per cent in December – for the next year, and expects the number to come at 2.8 per cent in March quarter, 3.2-3.4 per cent in first half of next fiscal and 3.9 per cent in third quarter of FY20.
Benchmark interest rate was cut by 0.25 per cent to 6.25 per cent, a move that would result in lower cost of borrowing for the banks that are expected to transmit the same to individuals and corporates.
“Headline inflation is projected to remain soft in the near term, reflecting the current low level of inflation and the benign food inflation outlook,” the MPC resolution said, adding “we need to be watchful of vegetable prices, oil prices, trade tensions, health and education inflation, financial market volatility and monsoon outcomes”.
The rate cut is in consonance of achieving the medium-term objective of maintaining inflation at the 4 per cent level while supporting growth, it said.
Deputy Governor Viral Acharya and another MPC member, Chetan Ghate, voted for status quo in interest rates, while Das and three others voted for a cut in interest rates.
Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.
Top News
Related Articles More
Epigamia founder Rohan Mirchandani dies of cardiac arrest at age 42
Lohia Auto launches EV brand ‘Youdha’, aims to sell 3 lakh vehicles by 2027
“FM ji FM ji, itna tax main kaise bharun”, asks investor Vijay Kedia in viral post
RBI: After another status quo year, all eyes on a growth-propping rate cut with new Guv at helm
Front-running case: Sebi bans 9 entities from market , impounds illegal gains of over Rs 21 crore
MUST WATCH
Latest Additions
Kalaburagi: Woman sustains burns after live electric wire falls on her
Nelamangala accident: Police expedite probe, CCTV images being scrutinised
Rohan Estate Mukka – Resort-style luxury layout launched
Minister Parameshwara directs police to ensure tight security in Bengaluru on New Year’s eve
Teachings of Lord Christ celebrate love, harmony: PM Modi at Christmas celebrations
Thanks for visiting Udayavani
You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.