First bi-monthly monetary policy review highlights

Following are the highlights of the first bi-monthly monetary policy for 2017-18 as announced by the RBI:

Policy repo rate unchanged at 6.25%, hikes reverse repo to 6%

Narrows policy rates corridor due to increased liquidity, post demonetisation

Pegs GVA growth for current fiscal at 7.4% as against 6.7% last year

Revises MSF, bank rate to 6.5%

Retail inflation in first half seen at 4.5%, 5% in second half

Economic indicators point to modest improvement in microeconomic outlook

Risk evenly balanced around inflation trajectory; upside risk from uncertainty about monsoon

Upside risk to inflation from GST, poor monsoon, pay commission award

Further scope for a more complete transmission of policy rates remains, including for small savings rates

All six MPC members voted in favour of RBI monetary policy

The next meeting of the Monetary Policy Committee on June 5 and 6.