The Reserve Bank of India (RBI) left the repo rate unchanged at the existing 4 percent on Thursday, following a three-day meeting of its six-member Monetary Policy Committee (MPC). The Monetary Policy Committee decided unanimously to leave the repo rate at the existing level, and maintain its “accommodative” stance on policy, Governor Shaktikanta Das said in a virtual address to media. An accommodative stance rules out any increases in the near term. The RBI Governor said the Monetary Policy Committee expects inflation to remain at elevated levels in the July-September period, and ease in the second half of the current financial year on account of “favorable base effect”.
Latest updates
-To enhance the safety of cheque payments, it has been decided to introduce a mechanism of Positive Pay for all cheques of value ₹50,000 and above. This will cover approximately 20 percent and 80 percent of total cheques by volume and value, respectively. Operational guidelines in this regard will be issued separately: RBI
-RBI will set up an innovation hub: Das
-Priority sector lending is also being given to startups: RBI
-Stressed MSME borrowers will be eligible for debt restructuring: RBI
-RBI is now announcing additional measures to enhance liquidity support, ease financial stress, improve the flow of credit, and deepen the digital payment system.
-Additional special liquidity will be provided to NABARD, National Housing Bank
-Mutual funds have stabilized since the Franklin Templeton episode: RBI
-Supply chain disruptions persist; inflation pressures evident across segments: RBI
-Economic activity had started to recover, but the surge in infection has forced imposition of lockdowns: RBI Governor Shaktikanta Das
-Real GDP growth is estimated to be negative for 2020-21.
-Inflation remains elevated in the second quarter but it is likely to ease. Recovery in the rural economy expected to be robust: Das
Imports fell sharply in June: Das
– Shaktikanta Das said global economic activity has remained fragile.
-RBI has maintained an accommodative stance
-Repo rate remains unchanged at 4%: RBI
-“Any measures to support the economy or certain stressed out sectors are expected,” said Mayuresh Joshi, head of equity research for India at William O’Neil in Mumbai, adding it could include a one-time restructuring of loans for banks saddled with bad debt.
-Investors will also see if the RBI extends a moratorium on loan repayments to banks, which analysts have said could worsen asset quality of lenders.
-The RBI’s target is to keep inflation in a range of 2%-6%, but consumer-price growth has exceeded the upper end of that band for most of the past two quarters.
-Of the 44 economists surveyed by Bloomberg, 22 expect a 25 basis-point rate cut on Thursday, one projects a 50-point move, and the rest see no change.
-“The focus is on restructuring. The Finance Ministry is actively engaged with RBI on this. In principle, the idea that there may be a restructuring required is well taken,” Finance Minister Nirmala Sitharaman had said last week.
-A Mint survey had shown that six out of 10 bankers polled expect RBI to keep the policy repo rate on hold at 4%, while the rest are expecting a 25 basis points cut
-This is the 24th meeting of RBI’s monetary policy committee.
-Shaktikanta Das will begin his speech at 12 noon.
