"To absorb surplus liquidity in the market, the RBI has used multiple tools like reverse repo, market stability, open market sales, deployed in a calibrated quantum. Although, the system still is in surplus liquidity mode, it is moving towards the neutrality objective," Viral said at a press conference post the release of the Central bank's bi-monthly Monetary Policy Statement here.
Earlier, the RBI's six-member Monetary Policy Committee (MPC) kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6 percent, and the reverse repo rate at 5.75 percent.
The MPC projected inflation in the range of 4.3-4.7 percent in the second half of 2017-18, including the impact of an increase in HRA. Also, inflation for Q4 was estimated at 5.1 percent, including the HRA impact.
Furthermore, CPI inflation for 2018-19 is estimated in the range of 5.1-5.6 percent in H1, including diminishing statistical HRA impact of central government employees, and 4.5-4.6 percent in H2, with risks tilted to the upside. (ANI)