Home / Knowledge / News / Textiles / RBI keeps repo rate unchanged at 7.25%
RBI keeps repo rate unchanged at 7.25%
04
Aug '15
The Reserve Bank of India (RBI) has kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 7.25 per cent, in its third bi-monthly Monetary Policy Statement, 2015-16 announced today.

In a press release, RBI said it has decided to keep the policy repo rate unchanged on the basis of an assessment of the current and evolving macroeconomic situation. The central bank has also kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liability (NDTL).

RBI said it will continue to provide liquidity under overnight repos at 0.25 per cent of bank-wise NDTL at the LAF repo rate and liquidity under 14-day term repos as well as longer term repos of up to 0.75 per cent of NDTL of the banking system through auctions. It will also continue with daily variable rate repos and reverse repos to smooth liquidity.

Accordingly, the reverse repo rate under the LAF will remain unchanged at 6.25 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 8.25 per cent, the release said.

In its assessment since the last bi-monthly statement, RBI said global economic activity has recovered modestly in Q2 of calendar 2015.

In India, the economic recovery is still work in progress. After strong rainfall in June, July has been below par, but on net, the monsoon is near normal. Higher reservoir levels also auger well for the prospects of kharif output, particularly for areas that are dependent on irrigation. Consequently, kharif sowing has expanded significantly relative to a year ago, especially in respect of oilseeds, pulses, rice and coarse cereals.

These developments, supported by contingency plans for vulnerable districts, provide cushion against adverse weather shocks. If prospects of a good harvest strengthen, currently weak rural demand will improve to provide an important boost to activity.

Shrinking exports in some industries, in part a result of weak global demand and global overcapacity in those industries and in part a result of the significant depreciation of currencies of some major trading partners against the rupee, also contributed to weak aggregate demand.

The Reserve Bank's survey-based indicators point to flat capacity utilisation and new orders, with corporate sales growth declining – although lower inflation explains some of the compression in top lines. Although overall business confidence is positive, the level of optimism was a shade lower in April-June than in the preceding quarter, RBI said.

Investment, as measured by new projects, is still weak, primarily because of still-low capacity utilisation. In the critically important power sector, where final demand is strong, the recent step-up in generation in response to the commendable easing of bottlenecks in coal supply is being partly negated by structural problems relating to clogging of transmission grids and the dire financial state of electricity distribution companies (DISCOMs).

Must ReadView All

Textiles | On 28th Apr 2017

Fix 5% GST rate for textile goods: Textile bodies

Uniform levy of 5 per cent Goods and Services Tax (GST) on all...

Textiles | On 28th Apr 2017

India lifts CVD imposed on Nepali Jute goods

The countervailing duty (CVD) that was imposed on Nepali jute...

Courtesy: Williamsburg Garment Company

Fashion | On 28th Apr 2017

'We have grown by staying small & maximising efforts'

The easiest way to go out of business is to be too big or expand too...

Interviews View All

Abhishek Samdaria
Reflete

GST will certainly reduce a lot of paperwork in future

Nuno Venda
ROQ

‘There has been an increase in demand for water based inks, rather than...

Mandeep Nagi
Shades of India

Women value something that is unique and has a flavour of India

Marcel Alberts
Eurofibers

Coating at a fibre level is a practice not usually seen in the...

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
April 2017

April 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search



X