Mumbai: The six-member Monetary Policy Commitee (MPC), chaired by RBI Governor Urjit Patel, started its three-day discussions from 3rd September, 2018, for decision on key interest rates amid rising oil prices, rupee woes and inflation floating around 3.69 per cent.
The MPC was meeting for its fourth bi-monthly Monetary Policy Statement for the year 2018-19. Reserve Bank of India has decided to keep the repo rate same at 6.50 per cent.
The Monetary Policy Committee (MPC) voted 5:1 in favour of a status quo, with only Chetan Ghate voting for a 0.25 per cent hike.
The Reserve Bank of India in its monetary policy meet in August decided to hike the key interest rates from 6.25 per cent to 6.50 per cent. The 0.25 per cent rise in interest rates came after a prolonged period of four-and-a-half-years in June 2018.
The MPC headed by RBI Governor Urjit Patel said that the recent excise duty cut by the government on petrol and diesel will help contain inflation.
The State Bank of India’s interest rate hike decision had come ahead of the RBI monetary policy announcement, it has from 1st September, 2018, raised the interest rates on fixed term deposits. The rates has been hiked to an extent of 20 basis points.
India’s wholesale inflation fell to a four-month low of 4.53 per cent in August on softening of food prices. The retail inflation too in August had fallen to 10 months low of 3.69 per cent, as per data released earlier.
The fall in wholesale and retail inflation should bring relief to the Modi government battling opposition attack over high fuel prices.