MPC retains stance at 'withdrawal of accommodation'

Mumbai, Dec 08: The MPC voted unanimously to keep repo rate unchanged. Moreover, the MPC retains stance at 'withdrawal of accommodation' post its three-day bi-monthly meeting which concluded today.

MPC voted 5-1 on stance. MSF rate adjusted to 6.75 per cent, while SDF rate stands at 6.25 per cent at present.

The RBI governor Shaktikanta Das said, “Global economy showing signs of slowdown while long-awaited normality eludes global economies.”

Endeavours are being made to build buffers against global supply shocks, he said, adding that emerging market economies were resilient in current volatility.

According to Das, “Global economy continues to remain fragile even as world trade decelerating amid protectionism.”

Remain highly alert, prepared to take action as warranted, he said, adding that financial markets remain volatile, wait for signals on rates.

Indian economy, he went on, presents picture of resilience, momentum as fundamentals of Indian economy remain strong.

He hinted that fiscal consolidation was on course.

Indian economy seeing robust domestic demand, he said, adding that domestic economic activity was holding out well.

The RBI governor sees moderation in all components of CPI while core inflation continues to remain sticky. Das sees broad-based easing in core inflation

Even as major central banks on hold, refrain from forward guidance, it provides congenial conditions for sustained growth of Indian economy.

External balance remains manageable, FX reserves give cushion. He said that November, December CPI prints must be watched for 2nd round effects.

Monetary policy must continue to be actively disinflationary, he warned, saying that sovereign bond yields softening as markets don't see rate hikes.