Key Takeaway – RBI’s MPC Meet Feb 2019

  • RBI’s MPC cuts repo rate by 25 bps to 6.25 percent. RBI has thus cut rate for the first time in 17 months. The last rate cut happened in August, 2017.
  • It has also changed the stance to “neutral” from ‘calibrated tightening’.
  • The CPI is seen at 3.9 percent In October -December 2019. Headline inflation is projected to remain soft in the near term reflecting the current low level of inflation and the benign food inflation outlook. Beyond the near term, some uncertainties warrant careful monitoring, RBIsays.
  • CPI is seen at 2.8 percent in January-March and 3.2-3.4 in April-September 2019.
  • RBI projects FY20 GDP growth at 7.4 percent.
  • The RBI withdraws 20 percent cap on FPI exposures to single Indian company debt.
  • RBI raises collateral-free farm loan limit by Rs 60,000 to Rs 1.60 lakh.
  • Import growth slowed in December says RBI Governor. Investment demand lost pace in Q3FY18. Credit flows in the industry also showed a decline. Farm output is expected to decelerate in FY19.
  • Will set-up an internal working group on policy framework for the agricultural space in India
  • On the contentious issue of interim dividend to the government, Das says the matter will be discussed and a call will be taken