Fourth Bi-monthly Monetary Policy Statement, 2017-18

Fourth Bi-monthly Monetary Policy Statement, 2017-18

  • On October 4th, 2017, Reserve Bank of India has issued Fourth Bi-monthly Monetary Policy Statement, 2017-18.
  • Monetary Policy Committee (MPC) made a resolution on the basis of an assessment of the current and evolving macroeconomic situation.

Monetary Policy Committee (MPC) has decided:

  • To keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.0 per cent.
  • Consequently, the reverse repo rate under the LAF remains at 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.25 per cent.
  • The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.

The main considerations underlying the decision are set out in the statement below-

  • The projection of real GVA growth for 2017-18 has been revised down to 6.7 per cent from the August 2017 projection of 7.3 per cent, with risks evenly balanced.
  • The MPC was of the view that various structural reforms introduced in the recent period will likely be growth augmenting over the medium- to long-term by improving the business environment, enhancing transparency and increasing formalisation of the economy.
  • The MPC also decided to keep the policy stance neutral and monitor incoming data closely.
  • The MPC remains committed to keeping headline inflation close to 4 per cent on a durable basis.


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