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RBI to announce monetary policy on December 7

The Reserve Bank’s monetary policy to decide key interest rates will be announced on December 7, Wednesday, amid spike in deposits following demonetisation of high-value currency raising hope of rate cuts.

business Updated: Dec 02, 2016 15:39 IST
The fifth bi-monthly policy will be the second monetary policy announcement after governor Urjit Patel took over as the RBI governor on September 4.
The fifth bi-monthly policy will be the second monetary policy announcement after governor Urjit Patel took over as the RBI governor on September 4.(PTI)

The Reserve Bank’s monetary policy to decide key interest rates will be announced on December 7, Wednesday, amid spike in deposits following demonetisation of high-value currency raising hope of rate cuts.

This is after many years that the RBI policy will be announced mid-week. Usually, the policy is announced on a Tuesday.

The fifth bi-monthly policy will be the second monetary policy announcement after governor Urjit Patel took over as the RBI governor on September 4.

The policy was earlier slated to be announced on December 6.

The Monetary Policy Committee (MPC) will meet on December 6 and 7, for the fifth bi-monthly monetary policy statement for 2016-17, the RBI website said on Friday.

“The resolution of the MPC will be placed on the website at 2.30 pm on December 7, 2016,” it added.

Amid the cash crunch and questions raised at the RBI’s handling of the situation, it remains to be seen if Patel will also dwell on the demonetisation move.

Experts suggest that with influx of deposits and stable inflation levels, the RBI is likely to cut key policy rate. The policy repo rate currently stands at 6.25%.

This will also be the second announcement made by the MPC consisting of six members with three members each from the RBI (RBI Governor, Deputy Governor and the Monetary policy nominee from the RBI) and those nominated by the Centre.

The six members will vote to decide on the interest rate changes with the RBI governor holding a casting vote in case of a tie.

Prior to this, the monetary policy was decided by the RBI governor.