Highlights of RBI's 4th Bi-Monthly Monetary Policy Statement 2015-16 Cogencis, Tuesday, Sep 29

MUMBAI - Following are the highlights of the Reserve Bank of India's
fourth Bi-Monthly Monetary Policy Statement for 2015-16 (Apr-Mar):

MAIN HIGHLIGHTS
* Repo rate cut by 50 bps to 6.75%
* Banks' CRR left unchanged at 4.0% of NDTL
* To continue providing liquidity under variable repos
* Reverse repo rate adjusted to 5.75%
* MSF rate, Bank Rate adjusted to 7.75%
* Banks' CRR left unchanged at 4.0% of NDTL
* Banks' deposit rates have reduced significantly
* Have frontloaded 50 bps cut in repo rate
* Policy stance to continue to be accommodative

INFLATION
* As projected, CPI inflation has dropped to 9-month low
* Food inflation contained by govt's resolute supply mgmt
* Disinflation has been broad-based
* Inflation excluding food, fuel has come off June's peak
* Inflation likely to go up from Sep for a few months
* Favourable base effect seen reversing Sep onwards
* Expect January CPI inflation at 5.8%
* 6% CPI inflation target for Jan "likely to be achieved"

FISCAL
* To fix FPI debt invest limit in rupee terms from now
* Key that proactive supply management by govt be in place
* Pass-through of rupee depreciation will be monitored
* Underlying econ activity weak on sustained export fall
* Underlying econ activity weak on rainfall deficiency
* Commodity prices will remain contained for a while
* Govt has reaffirmed desire to meet fiscal deficit aims
* Govt has reaffirmed desire to improve spending quality
* To work with govt to ensure bks pass on past rate cuts
* Liquidity conditions eased considerably Aug to mid-Sep
* Widening trade gap may push up Jul-Sep CAD modestly
* Cos can issue rupee bonds overseas with 5-yr maturity
* Foreign rupee bond issue within $51 bln corp debt cap
* Non-bks, PDs can take long-positions in when-issued mkt
* No curb on end use of foreign rupee bond issue proceeds
* Standalone PDs can deal in currency futures on bourses
* Norms on standalone PDs' currency futures deals Nov end
* To launch exchange-traded currency F&O in 3 cross pairs
* Exchange-traded currency F&O in euro-dlr, sterling-dlr
* Exchange-traded currency F&O also in dlr-yen
* CCIL member can short-sell gilt to its gilt acct holder
* To up FX hedge cap for residents in OTC mkt to $1 mln

GROWTH
* Cut FY16 output growth forecast to 7.4% vs 7.6% before
* Since Aug, most conditions for further easing been met
* Econ recovery far from robust
* Rural demand remains subdued
* Manufacturing has exhibited uneven growth in Apr-Jul
* Tentative recovery of econ underway