CHENNAI: The Monetary Policy Committee of the Reserve Bank of India is the key body that takes important decisions that would guide the Indian economy, and by extension, our household economies as well. The three-day meeting of the committee, which was held under the shadow of the war in Iran and the Gulf countries, had a lot on its plate. The outcome was as expected: hold fast, remain cautious, prepare for the full impact. Here are some of the key outcomes of the committee meeting that ended on Wednesday (April 8):
RBI kept its key policy rate unchanged at 5.25 per cent, adopting a cautious stance as policymakers assessed the fallout from the Iran war on energy supplies, inflation and growth. This means your EMIs won't go down, but it won't go up either.
Low interest rates may continue for long time, says RBI Governor Sanjay Malhotra.
Against 125 basis point rate cut, a 90 basis point transmission has taken place on lending side, says RBI Governor. In simpler words, that means your bank has passed on the benefit (largely but not fully) to you by way of cutting interest rates.
Inflation remains within the target band for now, but risks have risen due to volatile oil markets and the possibility of "second-round effects", which could weigh on demand and delay investment recovery.
Full economic impact of the Iran war – particularly through energy costs – will only become clearer in the coming months.
Growth outlook trimmed to 6.9% in the current financial year, a drop from an expected 7.6%.
For the first time, RBI offered a forecast for core inflation, which it sees at 4.4 per cent in the current financial year.
Not anticipating a dent to remittances from expat Indians, says RBI Deputy Governor Poonam Gupta.
Nothing related to governance, conduct noticed during supervisory inspection: RBI Governor on abrupt resignation of HDFC Bank Chairman.
Next meeting of RBI's rate-setting panel scheduled for June 3 to 5.