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RBI policy stance required rethink: Government
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SME Times News Bureau | 06 Dec, 2018
Economic Affairs Secretary Subhash Chandra Garg on Wednesday said the
'calibrated tightening' stance of RBI's Monetary Policy Committee (MPC)
probably needed a rethink even as he welcomed the decision on policy
rate.
"The government welcomes the assessment of the MPC. The
government notes its decision to maintain the policy rate. The policy
stance probably required calibration," Garg said in a statement issued
by the Ministry of Finance.
With inflation under control and
forecast of even lower inflation in the second half of the current
fiscal, there was a case for change in stance from 'calibrated
tightening' to 'neutral' even as the market believed the rates would
remain unchanged.
However, the MPC while keeping the repo rate
intact at 6.5 per cent, also retained the stance as it saw higher
implied volatility in the sharp decline in inflation in short term and
wanted to see whether fall in food and oil prices are durable in medium
term.
Garg also said that the RBI's decision to reduce Statutory
Liquidity Ratio (SLR) from existing 19.5 per cent to 18 per cent in six
quarterly instalments beginning January 2019 "will have some
implications for the government securities".
"However, the
momentum created by the reduction in oil prices and reversal of foreign
flows has resulted in further moderation of yields post policy
announcement," he said.
The assessment of the MPC for growth and
inflation outlook is consistent with that of the government, he said.
The GDP growth projection for 2018-19 is retained at 7.4 per cent as in
the fourth bi-monthly resolution in October, 2018.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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