RBI Monetary Policy Updates: Details on Repo Rate

Must Read

Game Regulation In Latin America13

Game Regulation In Latin AmericaMany countries around the world have different types of regulations in place for games...

18 nurses at Pune have tested positive for COVID-19

Eighteen nurses at a private hospital in Pune have been tested positive for COVID - 19 on April 18....

Coronavirus case in the Rashtrapati Bhavan

Nearly 100 people have been quarantined at the Rashtrapati Bhavan complex. This is after a sanitation worker there tested...

RBI Monetary Policy Updates: Details on Repo Rate of The Reverse Bank of India. RBI announced its sixth bi-monthly policy statement. But the repo rate was left unchanged. The Monetary Policy Committee (MPC) was led by Governor Shaktikanta Das. The committee decided to keep the policy repo rate at 5.15%. Also, persevere with the accommodative stance as long as necessary to revive growth. While ensuring that inflation remains within the target.

Reserve Bank of India (RBI): Monetary policy, Repo Rate

RBI monetary policy updates:

  • RBI said that the decision to conduct new one – year and three – year Repos worth Rs 1 lakh crore. And will ensure better monetary policy transmission by enabling banks to reduce lending rates.
  • The move to keep the policy rate and monetary stance unchanged will help in controlling inflationary expectations. As well, providing support to growth. The sharp rise in the inflation rate has constrained monetary policy rate cut. However, RBI’s focus has to be on monetary policy transmission in the credit market. Because the full benefit of a rate cut has not been passed yet to the consumer. The lower lending rate will provide some respite to investment rate. And growth going forward. The surging inflation and slowing growth are raising serious concerns. Those are about the future prospects of the growth in the economy.
  • The RBI MPC said that the onion prices are likely to ebb over the coming weeks. Also, months as supply conditions improved.

Read other News>>> Here

  • Das said RBI has no plans to monetise fiscal deficit.
  • RBI said that the increase in the limit of deposit insurance is not likely to impact the balance sheet of banks due to the increase in the premium outgo. The premium for bank deposits will be increased from 10 paise to 12 paise for the time being.
  • Subhada Rao, the chief economist of Yes Bank said that the RBI’s rate decision is in line with expectations. It is likely to maintain a status quo in the near term. With an inflation forecast of 3.2% factored in for Q3 FY21, in conjunction with our forecast we expect RBI rate action in October 2020 monetary policy.
  • The RBI governor said that the continuity in policy from the last pause should not be read as a pointer to future actions. While the decision is as per expectations, it is important not to discount RBI.
  • The current slowdown in the economy is driven by liquidity issues, weak rural demand and slow credit off-take. Therefore, if the RBI opts for the neutral stance it may impact liquidity and lending further.
  • The RBI governor said that the central bank has many instruments to address the sluggishness of the economy and not just the interest rates.
  • On the outbreak of Coronavirus in China, it may affect tourist arrivals and global trade.
  • RBI governor has said headline inflation has now peaked and is expected to go down.
  • After the RBI MPC meeting, the share market rose. Sensex 0.4% to 41,297.81 as of 12:14 pm while the Nifty advanced 0.3%.

Reserve Bank of India (RBI): Monetary policy, Repo Rate: SRO for digital payments

  • The Reserve Bank of India will put in place a framework for establishing a Self – Regulatory Organisation (SRO) for digital payment system by April 2020. This will foster best practices on customer protection and pricing, security, among others.
  • RBI has decided to link interest rate of loans given to medium enterprises. Also, to an external benchmark from April.
  • The monetary transmission has improved in sectors where new floating rate loans have been linked to the external benchmark.
  • Clearing of cheques could soon be faster as the RBI decided to extend the Cheque Truncation System (CTS) to all over India.
  • RBI has also decided to continue with the accommodative stance as long as it is necessary to revive growth while ensuring that inflation remains within the target.
  • All 37 economists in a Bloomberg survey predict the benchmark repurchase rate will stay at 5.15%, the lowest level since 2010.

These all are details on Reserve Bank of India (RBI): Monetary policy, Repo Rate

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

Latest News

Game Regulation In Latin America13

Game Regulation In Latin AmericaMany countries around the world have different types of regulations in place for games...
- Advertisement -

More Articles Like This

- Advertisement -