Monetary policy announced; RBI keeps repo rate unchanged at 4% while maintaining accommodative stance - (05 Feb 2021)
Banking
The Reserve Bank of India (RBI) announced its monetary policy. In its first policy after the Budget 2021, Monetary Policy Committee of RBI kept its repo rate unchanged at 4 per cent while maintaining an ‘accommodative stance’ and reverse repo rate at 3.35 per cent. The repo rate had slashed by 115 basis points by RBI since late March 2020 to support growth. It has last revised its policy rate on May 22, 2020 to increase demand by cutting interest rates to a historic low.
In addition to above, the major key points from monetary policy include:
i) India’s GDP growth for Financial Year 2022 predicted at 10.5 per cent.
ii) Consumer Price Index (CPI) projection is revised to 5.2 per cent for Quarter 4 of Financial Year 2021 and CPI inflation is fixed at 5-5.2 per cent for First Half of Financial Year 2022.
iii) Funds from banks though the TLTRO scheme will now available to NBFC.
iv) Cash Reserve Ratio (CRR) will be restored in two phases to 3.5 per cent from March 27, 2021 and 4 per cent from May 22, 2021.
v) Retail investors can now open gilt accounts with the RBI and also access the primary and secondary government bond market.
vi) Resident individuals will be able to make remittances to IFSCs for the NRIs.
vii) Integrated ombudsman scheme for customer grievance redressal is announced, which will be rolled out by June 2021.
Tags : RBI MONETARY POLICY
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