The Reserve Bank of India (RBI) maintained its neutral stance and kept the repo rate unchanged at 6.25% for the fourth time in a row.
The Monetary Policy Committee (MPC) maintained status quo with regard to the policy rate and avoided premature action at this stage when the inflation is below the RBI’s projection.
RBI Governor Urjit Patel said inflation outlook clouded with uncertainty and the RBI will wait for data for further clarity.
RBI Deputy Governor Viral Acharya said interest rate policy works well when it is transmitted properly.
“The RBI said the accommodative policy of 2015-16 failed to revive investments,” said Acharya.
Meanwhile, the MPC noted that incoming data suggest that the transitory effects of demonetisation have lingered on in price formations relating to salient food items, entangled with excess supply conditions with respect to fruits and vegetables, pulses and cereals.
Here are the 5 key takeaways from the monetary policy
