- The central bank has lowered its GDP forecast for FY22 from 10.5 percent to 9.5 percent.
- The Monetary Policy Committee (MPC) decided to keep key policy rates unchanged.
- Since March 2020, the RBI has reduced the repo rate by a total of 115 basis points (bps) to ease the effect of the coronavirus outbreak.
RBI Governor Shaktikanta Das made major rate decisions on Friday, following the panel’s three-day meeting on June 4.
The Reserve Bank of India (RBI) retained interest rates at a record low of 4%. According to Guv Das, the monetary panel would promote growth by maintaining its accommodative stance for as long as necessary.
The policy decision comes in the wake of India’s second wave of coronavirus outbreaks, which has wreaked havoc on the economy. The RBI is expected to keep key rates steady, according to the majority of analysts polled by Bloomberg.
Highlights of the RBI’s Monetary Policy:
- To strengthen the market, G-SAP 2.0 worth 1.2 lakh crore will be taken in the second quarter of FY22.
- The RBI’s attention has shifted to a more equal distribution of liquidity: RBI
- According to RBI data released on Friday, the country’s foreign exchange reserves increased by USD 2.865 billion to a new high of USD 592.894 billion for the week ending May 21, boosted by gold and currency assets.
- Due to a normal monsoon forecast, rural demand is likely to stay strong: Guv Das
- In FY21-22, real GDP is expected to be 9.5 percent considering all the factors. RBI Governor Shaktikanta Das expects CPI inflation to be 5.1 percent in FY21-22.
- The second covid wave poses inflation risks, according to Governor Shaktikanta Das.
- Governor Shaktikanta Das says the latest CPI inflation print offers RBI considerable policy flexibility.
- Agriculture’s resilience, as well as the global economy’s growing pace, can provide a boost to the domestic economy, according to the governor of the Reserve Bank of India.
- The reverse repo rate was kept at 3.35 percent, the MSF rate was kept at 4.25 percent, and the bank rate was kept at 4.25 percent.
- “The greater the obstacle, the more glory in surmounting it,” says Gov. Das, quoting Epictetus.
- RBI Governor Shaktikanta Das says the Monetary Policy Committee unanimously opted to keep the repo rate at 4% and retain an accommodative stance.
- Since April, the second wave of Covid-19 has been devastating numerous states. According to Das, the MPC believes that policy assistance from all sides is essential at this time.
- Experts foresee an increase in inflation and a decrease in GDP growth.
- Fears of inflation aggravating the impact of the second wave of covid infections have prompted the Reserve Bank of India to keep policy rates unchanged for the sixth consecutive meeting.
- After a flurry of recent high-frequency indicators showed a damage to activity, the central bank, which forecasts the economy to expand 10.5 percent in the year that began in April, is likely to lower its prediction.
- The rupee recovered 18 paise to close at 72.91 against the US dollar, ending a three-day losing skid.
- The Reserve Bank of India (RBI) instructed banks, non-bank financial companies (NBFCs), and payment system providers not to cite its previous virtual currency-related circular, which was published in April 2018 and later set against by the Supreme Court, in their communications to customers.