India Markets closed

Highlights of RBI's monetary policy statement

Chaitra Anand
·2-min read

The Reserve Bank of India's Monetary Policy Committee (MPC) has voted unanimously to leave the policy repo rate unchanged at 4 percent, central bank Governor Shaktikanta Das announced on Friday, 9 October.

Following are the highlights of RBI Governor Shaktikanta Das' statement and resolution of the Monetary Policy Committee (MPC):

-Benchmark lending rate kept unchanged at 4 pc

-Indian economy expected to contract 9.5 pc this fiscal with downside risks

-Contraction 9.8 per cent projected in July-September; 5.6 pc in October-December and rebound in growth at 0.5 per cent in March quarter

-GDP growth for April-June quarter 2021-22 fiscal projected at 20.6 pc

-Accommodative monetary policy stance maintained to support growth

* Indian economy entering into decisive phase in fight against coronavirus, focus must shift from containment to reviving economy

-Contraction in economic growth of Q1 behind; silver linings are visible

-GDP growth may break out of contraction and enter positive zone by March quarter of current fiscal

-Inflation to remain elevated in September quarter, but ease gradually towards the target over December and March quarters

-Retail inflation projected at 6.8 per cent for September quarter

-Current inflation hump transient; agriculture outlook looks bright, oil prices to remain rangebound

-RTGS fund transfer system for real-time fund transfer to become 24X7 from December

-Threshold for aggregate exposure of retail bank loans to one counterparty increased to Rs 7.5 crore from Rs 5 crore

-System-based automatic caution-listing for exporters discontinued to help them negotiate better terms with overseas buyers

-Comfortable liquidity position to be maintained; Rs 20,000 crore-OMO auction next week

-On-tap targeted long-term repo operations (TLTRO) to be conducted, with tenors of up to three years for Rs 1 lakh crore at a floating rate linked to the policy repo rate up to March 31, 2021

-All MPC members vote for keeping the policy repo rate unchanged and continue with the accommodative stance.

Source: PTI JD ANS ANS, The Quint, ET Now