{"id":18471,"date":"2018-04-10T16:02:01","date_gmt":"2018-04-10T10:32:01","guid":{"rendered":"http:\/\/blog.forumias.com\/?p=18471"},"modified":"2018-04-13T12:22:54","modified_gmt":"2018-04-13T06:52:54","slug":"rbis-bi-monthly-monetary-policy-review-of-2018-19","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/rbis-bi-monthly-monetary-policy-review-of-2018-19\/","title":{"rendered":"RBI\u2019s bi-monthly monetary policy review of 2018-19"},"content":{"rendered":"<p><strong><u>Context: <\/u><\/strong><\/p>\n<ul>\n<li>Recently, the first bi-monthly monetary policy review of 2018-19 has been introduced.<\/li>\n<\/ul>\n<p><strong><u>Background:<\/u><\/strong><\/p>\n<p><strong>4<sup>th<\/sup> April, 2018:<\/strong><\/p>\n<ul>\n<li>The Reserve Bank of India\u2019s (RBI\u2019s) Monetary Policy Committee (MPC) has introduced the first bi-monthly monetary policy review of 2018-19.<\/li>\n<li><strong>Please note:<\/strong> Meetings of the Monetary Policy Committee are to be held at least <strong>4 times a year. \u00a0<\/strong><\/li>\n<li>This was the <strong>first Monetary Policy Committee<\/strong> meeting\u00a0of the financial year 2018-2019.<\/li>\n<li>The <strong>second bi-monthly policy meeting<\/strong> in the FY19 is scheduled on <strong>5th and 6th June, 2018<\/strong> respectively.<\/li>\n<\/ul>\n<p><strong><u>Monetary policy:<\/u><\/strong><\/p>\n<ul>\n<li>Process by which monetary authority of a country controls the supply of money in the economy by its control over interest rates in order to maintain\u00a0price stability\u00a0and achieve high economic growth.<\/li>\n<li><strong>Please note:<\/strong> RBI and the government signed the <strong>Monetary Policy Framework Agreement<\/strong> on <strong>20<sup>th<\/sup> February, 2015<\/strong>.<\/li>\n<\/ul>\n<p><strong><u>Monetary policy committee:<\/u><\/strong><\/p>\n<ul>\n<li>Created in<\/li>\n<li>Committee of the <strong>Reserve Bank of India. <\/strong><\/li>\n<li>Headed by <strong>its Governor. <\/strong><\/li>\n<\/ul>\n<p><strong>Committee Structure:<\/strong><\/p>\n<ul>\n<li>The committee comprises<strong> six<\/strong><\/li>\n<li><strong>Three officials<\/strong> of the\u00a0Reserve Bank of India.<\/li>\n<li><strong>Three external members<\/strong> nominated by the\u00a0Government of India.<\/li>\n<\/ul>\n<p><strong>Objective: <\/strong><\/p>\n<ul>\n<li><strong>Fixing the benchmark policy interest rate<\/strong> (repo rate) to contain inflation within the target level.<\/li>\n<li><strong>Please note:<\/strong> The <strong>government <\/strong>can convey its views to the MPC from time to time.<\/li>\n<li><strong>RBI i<\/strong>s also mandated to furnish necessary information to the MPC to facilitate their decision making.<\/li>\n<\/ul>\n<p><strong><u>Salient features of RBI\u2019s bi-monthly monetary policy review of 2018-19 are: <\/u><\/strong><\/p>\n<ol>\n<li>Benchmark repo rate has been kept <strong>unchanged at 6%.<\/strong><\/li>\n<li>Reverse repo rate has also been left <strong>unchanged at 5.75%<\/strong> and the bank rate at <strong>25%.<\/strong><\/li>\n<li>The inflation projection to <strong>7-5.1%<\/strong> in the first half of the financial year 2018-2019 and <strong>4.4% in H2 <\/strong>has been revised.<\/li>\n<li>A GDP growth of <strong>4% in FY19<\/strong> from <strong>6.6% in FY18<\/strong> has been forecasted.<\/li>\n<li>Further, the\u00a0GDP growth has been projected at <strong>3-7.4% in H1<\/strong> and <strong>7.3-7.6% in H2<\/strong> of <strong>FY19.<\/strong><\/li>\n<li>A minimum level of<strong> &#8216;loan component&#8217; <\/strong>in fund based working capital finance for larger borrowers is being specified.<\/li>\n<li>Concerns are raised\u00a0on the <strong>global trade war<\/strong> and <strong>stock market volatility<\/strong> triggered by uncertainty regarding the pace of normalisation of US monetary policy.<\/li>\n<li>Warnings have been circulated to all the <strong>banks and financial entities<\/strong> to restrain themselves\u00a0dealing\u00a0with <strong>virtual currencies <\/strong>and <strong>cut all the ties<\/strong> within three months.<\/li>\n<li><strong>Inflation <\/strong>in respect of liquefied <strong>petroleum gas<\/strong> has declined in line with <strong>international price movements. <\/strong><\/li>\n<li>Furthermore, the rate of increase in prices of <strong>firewood and chips, and dung cake<\/strong> has been moderated.<\/li>\n<li>Signs of revival in <strong>investment activities<\/strong> with exports to getting a\u00a0boost\u00a0from the\u00a0<strong>improvement\u00a0in<\/strong> <strong>global demand<\/strong> have been cleared.<\/li>\n<li>Establishment of a <strong>Data Sciences Lab<\/strong> within the RBI has been proposed.<\/li>\n<\/ol>\n<p><strong><u>Conclusion:<\/u><\/strong><\/p>\n<p>Thus, the RBI has done well to adopt a lot balanced approach in the current economic context.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Context: Recently, the first bi-monthly monetary policy review of 2018-19 has been introduced. Background: 4th April, 2018: The Reserve Bank of India\u2019s (RBI\u2019s) Monetary Policy Committee (MPC) has introduced the first bi-monthly monetary policy review of 2018-19. Please note: Meetings of the Monetary Policy Committee are to be held at least 4 times a year.&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/rbis-bi-monthly-monetary-policy-review-of-2018-19\/\">Continue reading <span class=\"screen-reader-text\">RBI\u2019s bi-monthly monetary policy review of 2018-19<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":4740,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-18471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy-2","entry"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2017\/07\/reserve-bank-of-india-rbi-.jpg?fit=1006%2C504&ssl=1","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/18471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=18471"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/18471\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/4740"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=18471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=18471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=18471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}