Question: RBI in its fifth Bi- monthly Monetary policy Statement lowered its forecast for India’s gross domestic product (GDP) growth to –
(a) 7.2
(b) 7.6
(c) 7.1
(d) 7.4
Ans:(c)
Related facts:
- On 7 December, 2016; RBI governor Urjit Patel led six-member Monetary Policy Committee (MPC) has released its fifth Bi- monthly Monetary policy Statement, 2016-17.
- The RBI kept keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25 per cent.
- The reverse repo rate under the LAF remains unchanged at 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent.
- It may be recalled that Reserve Bank of India (RBI) on 5 October 2016 in its fourth Bi- monthly Monetary policy Statement cut repo rate by 25 bps to 6.25 per cent.
- Statutory Liquidity Ratio (SLR) remains unchanged at 20.75 per cent.
- Reserve Ratios Cash Reserve Ratio (CRR) of scheduled banks also remains unchanged at 4.0 per cent of net demand and time liability (NDTL).
- The MPC also has cut Gross Value Added (GVA) growth estimates for the economy in the fiscal year ending March 2017 to 7.1% from 7.6% earlier.
- The decision of the MPC is consistent with an accommodative stance of monetary policy in consonance with the objective of achieving consumer price index (CPI) inflation at 5% by Q4 of 2016-17 and the medium-term target of 4% within a band of +/- 2%, while supporting growth.
Reference:
https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=38818
https://rbi.org.in/scripts/Annualpolicy.aspx
http://www.livemint.com/Industry/YP7odc0NG8deWiSoWW060L/RBIs-monetary-policy-statement-Key-highlights.html