2nd Bi-Monthly Monetary Policy Statement Released: Repo Rate Reduced to 5.75%

The 2nd Bi-Monthly monetary policy statement has been released. On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting decided to:

1. Reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 5.75% from 6.00% with immediate effect.
2. Consequently, the reverse repo rate under the LAF stands adjusted to 5.50%, and the marginal standing facility (MSF) rate and the Bank Rate to 6.0%. 
3. GDP growth for 2019-20 is projected at 7.2%.

GDP growth plunged to a five-year low of 5.8% in the January-March quarter due to lackluster growth in agriculture, manufacturing, construction, trade, hotels and power sectors. This, in turn, pulled down the FY19 GDP growth rate to a five-year low of 6.8%. The next meeting of the MPC is scheduled during August 5 to 7, 2019.