Wednesday, 7 December 2016

RBI cuts FY17 GDP growth target to 7.1% on demonetisation impact

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The Reserve Bank of India has trimmed GDP growth forecast for the current fiscal sharply to 7.1 percent from 7.6 percent target earlier, citing demonetisation as the main reason. This is sharper than the 200-300 basis points fall that most economists and brokerages had been predicting. The central bank also kept benchmark rates unchanged, contrary to market expectations that the repo rate would be cut by 25 basis points. 

The outlook for GVA (gross value added) growth for 2016-17 has turned uncertain after the unexpected loss of momentum by 50 basis points in Q2 and the effects of the withdrawal of SBNs (specified bank notes) which are still playing out," the RBI policy statement said.ectations that the repo rate would be cut by 25 basis points. 

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