{"id":34774,"date":"2018-10-31T13:15:53","date_gmt":"2018-10-31T07:45:53","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=34774"},"modified":"2018-10-31T13:15:53","modified_gmt":"2018-10-31T07:45:53","slug":"rbi-neutral-over-dovish","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/rbi-neutral-over-dovish\/","title":{"rendered":"RBI: Neutral over dovish:\u00a0"},"content":{"rendered":"<p><a href=\"http:\/\/www.livemint.com\/Opinion\/LvhEBnv2Sz1mXHqq3UVmIM\/RBI-Neutral-over-dovish.html\"><span style=\"font-weight: 400;\">RBI: Neutral over dovish<\/span><\/a><span style=\"font-weight: 400;\">:\u00a0<\/span><\/p>\n<p><b>Context: <\/b><\/p>\n<p><span style=\"font-weight: 400;\">RBI has kept the repo rate unchanged at 6%<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/p>\n<p><b>What are the other recent declarations made by RBI?<\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Reverse repo rate kept unchanged at 5.75<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Marginal standing facility (MSF) rate and the Bank Rate kept at 6.25 per cent<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">Cash Reserve Ratio (CRR) kept unchanged at 4%<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Statutory liquidity ratio (SLR) requirement has been cut by 50 basis points to 19.5 per cent.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Inflation projection has been narrowed down for the \u00a0second half of the FY18 to 4.2% to 4.6% from the earlier 4-4.5%<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Growth estimate has been reduced to 6.7% from 7.3%<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/li>\n<\/ul>\n<p><strong>What is the reason behind RBI\u2019s decision to keep key policy rate unchanged?<\/strong><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">The Monetary Policy Committee (MPC) of Reserve Bank has decided to keep the key policy rate unchanged as it projects risks to inflation.<\/span><\/li>\n<\/ul>\n<p><b>What is the current growth trend?<\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Economic slowdown<\/span><\/li>\n<li><span style=\"font-weight: 400;\">However, high frequency numbers are showing signs of revival, including auto-sales, PMI-manufacturing, core industries index etc.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Growth is expected to be 6-7% in the second half of the FY18.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">However, full-year growth will still be at a three-year low<\/span><\/li>\n<\/ul>\n<p><b>What does this growth trend imply?<\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">There is no urgent requirement to lower any of policy rate<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Central government has more time to observe and analyze the shifting global developments, like higher oil prices and rising interest rates, into domestic fiscal policy.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Once GST-led uncertainties are over, the government should take measures to support growth<\/span><\/li>\n<\/ul>\n<p><b>What steps should the government take to support growth?<\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">The government should put more emphasis on the recovery of non-performing assets<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Emphasis should also be put on rebuilding banks\u2019 balance sheets<\/span><\/li>\n<\/ul>\n<p><b>Despite recent speculations of a fiscal stimulus, the government has not taken measures. Why so? <\/b><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">There is a need to strike a balance between growth and fiscal discipline. <\/span><\/li>\n<li><span style=\"font-weight: 400;\">More time is needed to assess downside risks to growth and revenue collections.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>RBI: Neutral over dovish:\u00a0 Context: RBI has kept the repo rate unchanged at 6% What are the other recent declarations made by RBI? Reverse repo rate kept unchanged at 5.75 Marginal standing facility (MSF) rate and the Bank Rate kept at 6.25 per cent Cash Reserve Ratio (CRR) kept unchanged at 4% Statutory liquidity ratio&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/rbi-neutral-over-dovish\/\">Continue reading <span class=\"screen-reader-text\">RBI: Neutral over dovish:\u00a0<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[],"class_list":["post-34774","post","type-post","status-publish","format-standard","hentry","category-test-1","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704801793},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/34774","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=34774"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/34774\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=34774"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=34774"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=34774"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}