The Reserve Bank of India has given investors a cheap loan offer. The RBI has cut the repo rate by 0.25 percent in the credit policy. The new Repo rate has decreased from 6.25 percent to 6 percent. The Reverse repo rate has decreased to 5.75 percent. At the same time, the marginal standing facility ie MSF rate and bank rate has decreased from 6.5 per cent to 6.25 percent.
Four out of 6 members of the Monetary Policy Committee voted in favor of a 0.25 percent reduction. At the same time, one member had 0.5 percent and one member supported not to make any changes. RBI has estimate retail inflation at 4 percent. RBI thinks retail inflation may increase in the next 1.5 to 2 years.
The GVA estimate for the fiscal year 2018 is 7.3 percent. RBI estimates that retail inflation may remain around 4 percent. Retail inflation may increase by 1 percent in 18-24 months. According to the RBI, debt waiver is expected to increase the fiscal deficit.
RBI governor Urjit Patel said that due to continuous reduction in inflation, decision has been taken to cut interest rates. The core inflation rate is consistently low in 3 months. Normal monsoon, the effect of supply on food inflation is possible. The RBI has also expressed the possibility of further inflation.
At the same time, the RBI believes that it is important to promote Affordable Housing Scheme and it is also necessary to remove infrastructure constraints. According to the RBI, there is no problem in implementing the GST.