RBI Governor Shaktikanta Das today announced Monetary Policy Committee (MPC) and MPC decided to keep the rate unchanged at 4 %. Monetary Policy Committee of the RBI on the basis of an assessment of the current and evolving macroeconomic situations, has decided to keep the repo rate and reserve repo rate unchanged under liquidity adjustment facility.
“As per the MPC, the Reserve Repo Rate under the LAF remains same at 3.35% and Marginal Standing Facility (MSF) Rate and Bank Rate at 4.25%.”
RBI Governor also said that Indian economy is on the upward curve and we expect that it will achieve all the targets set by Government. Investment in the health sector, infrastructure sector, and manufacturing sector will increase employment in the market.
Policy added, “Prices of petrol and diesel have reached historical highs. An unwinding of taxes on petroleum products by both the Centre and the Sates could ease the cost-push pressure.”
What is needed at time of crisis is to create conditions that result in a durable disinflation. It also depends on supply-side measures.
“Aim is to regain the revive growth on durable basis and mitigate the impact of COVID-19 on the economy and committee also ensuring to control the inflation within the targeted rate” committee said”.
These are the important highlights of MPC:
- Interest rates remain unchanged for the 4 time in a row
- RBI decides to continue with accommodative stance as long as required
- Short term lending or repo rate remains at 4 per cent
- Real GDP growth is projected at 10.5 per cent for financial year (FY) 2020-21
- RBI governor Shaktikanta Das ensures that the Indian Economy is surging in only one direction that is upward direction
- RBI governor praises the Union Budget 2021 and said budget will help to revive the Indian economy and also strengthen the sectors such as health and infrastructure
- RBI proposes to provide fund from banks under TLTRO on tap scheme to NBFCs for incremental lending
- RBI to restore cash reserve ratio (CRR) at 4 per cent in two phases starting from March 2021
- To centralized processing of grievances, RBI will integrate all the ombudsman scheme and calling it one-nation-one-ombudsman
- RBI revises retail inflation outlook – 5.2 per cent for Q4 2020-21, 5 per cent in H1 2020-21 and 4.3 per cent for Q3 2020-21
- RBI is set to announce a new scheme that incentives new credit facility to MSME
- To strengthening primary/urban Co-operative banks, RBI to set up panel to provide medium-term road map
- RBI to key eye on digital payment services generating round the clock helpline
The next meeting of RBI Monetary Policy Committee (MNC) will be headed by the RBI governor in the first week of April.
The meeting was headed by the RBI Governor Shaktikanta Das. All the members of the MPC – Dr. Shashank Bhide, Dr. Ashima Goyal, Dr. Michael Debabrata Patra, Prof. Jayanth R. Verma, Dr. Mridul K Sagar voted to keep the policy rate remain same at 4 per cent.
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