Monday, December 18, 2017

"RBI maintains status quo; does not cut rates on inflation worries”: Dr Niranjan Hiranandani
Thursday, December 7, 2017 - 1:30:52 AM - By News Bureau
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Dr Niranjan Hiranandani Founder & CMD, Hiranandani Communities & National President - NAREDCO
MUMBAI : The Monetary Policy Committee headed by RBI Governor Urjit Patel following its two-day deliberations, on 06 December 2017, maintained status quo as regards Repo and Reverse Repo rates, amid inflation concerns.

The Repo rate continues to be at 6 per cent, Reverse Repo rate was also unchanged at 5.75 per cent. In August this year, RBI had cut Repo rate by 25 basis points, said Dr Niranjan Hiranandani, CMD, Hiranandani Communities and President, NAREDCO (Nation).

“Going by the market sentiments, it seemed that the RBI was not likely to lower the key interest rate, and would stay focused on controlling inflation,” said Dr Niranjan Hiranandani. “One would ideally, have looked for a rate cut, but the scenario is one where the RBI’s monetary policy committee maintained the existing repo rate in the monetary policy review.”

The neutral stance of the monetary policy is in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, according to a media release from the RBI.

Taking into account global and national economic indicators, RBI retained its October outlook for real Gross Value Added (GVA) growth for 2017-18 at 6.7 per cent. “It needs to be noted that RBI has raised its inflation forecast to 4.3 - 4.7 per cent in Q3 and Q4 of the current fiscal,” said Dr Niranjan Hiranandani, adding that inflation was seen to be the reason behind the RBI's decision to maintain status quo.

The Monetary Policy Committee will review the repo rate again on February 6 and 7, 2018, and we hope the conditions will have evolved to a situation where it reduces the repo rates, concluded Dr Niranjan Hiranandani.
Dr Niranjan Hiranandani
Founder & CMD
Hiranandani Communities
National President
NAREDCO
RBI
maintains
status quo; does not
cut
rates
inflation worries