5 things to watch for at RBI monetary policy meeting today

Economy       RBI holds interest rates amid slowing inflation
       
       	        Anirban Nag         5 December 2018

In its last bi-monthly monetary policy, the bank had kept the repo rate unchanged at 6.5 percent. With no change in the rates, the repo rate remains at 6.50 percent while the reverse repo rate stands 6.25 percent.

The Central Bank of the Republic of Turkey (CBRT) will continue to effectively use all policy instruments at hand to maintain price stability in 2019, according to its new fiscal and monetary policy for the new year announced Wednesday. The reverse repo rate is used by the monetary policy committee as a tool to control the money supply in the country.

While the Statutory Liquidity Ratio now remains unchanged at 19.5%, the RBI has said it will be gradually reduced to 18% over the next six quarters.

The SLR is being cut in order to align it with the Liquidity Coverage Ratio (LCR) requirement. Currently, SLR stands at 19.5 per cent. SLR refers to the share of bank's total deposit that it needs to maintain itself as liquid assets.

The central bank has retained the GDP growth projection for 2018-19 at 7.4 per cent. It also means "we are not bound to increase interest rates every meeting, because that's not needed", RBI Governor Urjit Patel had explained in the previous meet.

RBI to announce its fifth bi-monthly monetary policy review of the current financial year this afternoon

Over the past five years, annual inflation saw its lowest level in April 2013, with 6.13 percent, and its highest level this October.

The MPC, which takes the decisions on the key interest rates, has six members, three of which are members of the RBI, while the rest are appointed by the Government of India.

Inflation projection lowered: Inflation has been projected at 2.7-3.2 per cent for second half of FY2018-19 and 3.8-4.2 per cent for the first half of FY 2019-20, with risks tilted to the upside. This may inject almost ₹65,000 crore of liquidity into the system.

The RBI also announced an auction of a 12-day Government of India Cash Management Bill.

India uncertain about Aussie sledging ahead of first Test
Kohli averaged 86.50 with the bat that series, scoring 692 runs in eight innings, including four centuries. Back in 2014, Mitchell Johnson and Virat Kohli had a go at each other during the Melbourne Test.

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