Indian stock markets shut for Eid celebrations
Indian stock exchanges are shut Thursday for Eid, with normal trading activities resuming Friday.
The six-member monetary policy committee (MPC) on Thursday kept the key repo rate unchanged at 5.15 per cent in view of the uptick in inflation.
The Reserve Bank of India (RBI) also pegged country’s GDP growth for 2020-21 at 6 per cent.
The MPC, which commenced its three-day discussions from February 04, held their first meeting after Budget 2020 and the last one for the fiscal year 2019-20.
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The RBI has kept the repo rate unchanged at 5.15 per cent maintaining status quo. Inflation for December had touched 7.35 per cent raising the case for a no rate-cut.
Though there are expectations of a moderation in inflation from the elevated level of 7.35 per cent in December 2019, the Monitory Policy Committee (MPC) has maintained the policy repo rate at 5.15 per cent in the monetary policy meeting held on Thursday.
The RBI MPC considers CPI inflation for its monetary policy actions and inflation is expected to be within the comfort zone of the MPC in the next fiscal. However, fiscal deficit has not only breached the target but is budgeted at 3.5 per cent for 2020-21, including the reported off-budget liabilities, it works out to 4.3 per cent. For the current fiscal it is 3.8 per cent estimated. Government has used the ‘Escape’ clause to expand fiscal deficit.
The breaching of the fiscal deficit target by 0.5 percentage points (from previous budget estimates) for both, the current fiscal, as well as the next, has also weighed in on the MPC decision.
(With input from agencies)
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