Wednesday, December 7, 2016
RBI Governor Urjit Patel's first credit Policy - 2.30 pm
The move not to cut repo rate comes as a big surprise since most economists were of the view that post demonetisation, RBI would be compelled to cut rates. This is the first monetary policy review after Modi government’s demonetisation step and the fifth bi-monthly monetary policy statement for 2016-17. The decision comes at a time when India’s GDP grew at 7.2% versus 7.6% YoY in the second quarter of the current financial year. The Narendra Modi government on November 8 announced that all old Rs 500 and Rs 1000 notes will cease to legal tender money. The move was aimed at rendering black money useless. However, with a huge amount of money being withdrawn from circulation(86%), there is a near-unanimous view that the short-term impact on growth would be harmful.