Highlights of RBI policy: Q4FY18 inflation projection raised to 5.1%

Urjit Patel, RBI Governor
Following are the highlights of the RBI's 6th bi-monthly monetary policy statement:

* Key lending rate (repo) unchanged at 6%

* Reverse repo rate remains at 5.75% and marginal standing facility (MSF) rate and Bank Rate at 6.25%

* Monetary policy's stance neutral

* Petrol and diesel prices rose sharply in Jan, reflecting lagged pass-through of past increases in global crude prices

* Retail inflation estimated at 5.1% in Q4 this fiscal and 5.1-5.6% in H1 of FY2018-19

* Inflation likely to ease to 4.5-4.6% in H2 of FY19

* Gross Value Added (GVA) growth for FY18 seen at 6.6%

* GVA growth for 2018-19 projected at 7.2%

* GST stabilising, which augurs well for economic activity

* Early signs of revival in investment activity

* RBI seeks pick-up in credit growth due to recapitalisation of PSBs and resolution proceedings under IBC

* Export growth expected to improve further on account of improving global demand

* RBI says focus of Union Budget on rural and infrastructure sectors a welcome development

* Five members voted in favour of status quo in interest rate; one member voted for increase of 0.25%

* Next meeting of the MPC on April 4 and 5

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