Reserve Bank of India with their latest interest rate decision 7 June
- reverse repo left at 6.00%
- cuts statutory liquidity ratio of banks by 50 bps to 20% of total depos
- ceiling on amount of securities that can be held under "held to maturity" remains unchanged
- policy interventions inc access to open trade may be envisaged to arrest slump in prices
- easing of inflation exc food and fuel may be transient in view of underlying stickiness in situation of rising rural wage growth and consumption demand
- headline inflation for H1 2017/2018 2-3.5% and 3.5-4.5 in H2
- need to ensure whether or not the unusually low momentum in inflation reading for April will endure
- 5 members of MPC in favour of policy decision, Dholakia not in favour
- all MPC members declined request for pre-policy meeting with finance ministry
USDINR lower at 64.35 from 64.45 prior to the announcement with some observers hoping for a rate cut.
