RBI retains 7.4 percent GDP growth forecast

Last Updated: Wed, Jun 06, 2018 16:43 hrs

[India], June 6 (ANI): The Reserve Bank of India (RBI) Governor Urjit Patel on Wednesday announced that the Monetary Policy Committee (MPC) has retained its FY19 GDP growth forecast at 7.4 percent.

Talking about the inflationary pressures that have been rising in the emerging economies, RBI Governor Urjit Patel said that the MPC sees major upside risk to the inflation path as crude prices rose nearly 12 percent.

"For FY19, the forecast of a normal south-west monsoon augurs well for agriculture sector," Patel said while stating that both urban and rural consumption remains healthy.

Excluding HRA impact, RBI governor added that the CPI inflation projected at 4.6 percent in H1 and 4.7 percent in H2.

RBI has also decided to grant banks the option to spread the mark-to-market (MTM) losses on investments held in Available for Sale (AFS) and Held for Trading (HFT) portfolio for the quarter ending June 30, 2018, equally over a period of four quarters, commencing from the quarter ending June 30, 2018.

RBI said that it is closely monitoring low-ticket housing and will consider appropriate policy response such as a tightening of the LTV ratios and/or an increase in the risk weights, should the need arise.

The central bank highlighted it's objectives to deepen further the G-Secs market, to liberalise the eligible participants' base and relax the entity-wise limits for taking positions in the when issued market.

Adding to this, the MPC said that the manufacturing PMI remained in an expansionary mode for the tenth consecutive month in May on the back of new domestic orders and exports.

The Reserve Bank of India (RBI) on Wednesday hiked the repo rate and reverse repo rate at 6.25 percent and 6 percent respectively.

Maintaining a neutral stance, the central bank's six-member Monetary Policy Committee (MPC), in its Monetary Policy Statement reiterated its commitment to achieving the medium-term target for headline inflation of 4 percent on a durable basis.

"GDP growth is projected in the range of 7.5-7.6 percent in H1 and 7.3-7.4 percent in H2, with risks evenly balanced," stated the Monetary Policy statement. (ANI)

More from Sify: