RBI Policy: Top 10 announcements made by Governor Das after MPC meet

Cogencis, Friday, Dec 4, 2020

MUMBAI – Following are edited excerpts of the top 10 announcements made by Governor Shaktikanta Das today after the Reserve Bank of India's Monetary Policy Committee meeting:

  1. Keep the policy repo rate unchanged at 4%. Consequently, reverse repo rate remains unchanged at 3.35%, and MSF rate and the Bank Rate at 4.25%.
  2. To continue with accommodative stance as long as necessary, at least during the current financial year and into the next financial year, to revive growth on a durable basis.
  3. CPI inflation is projected at 6.8% for Q3:2020-21, 5.8% for Q4:2020-21; and 5.2% to 4.6% in H1:2021-22, with risks broadly balanced
  4. Cost-push pressures continue to impinge on core inflation, which has remained sticky and could firm up as economic activity normalises and demand picks up.
  5. GDP growth is projected at (-)7.5% in 2020-21: (+)0.1% in Q3:2020-21 and (+)0.7% in Q4:2020-21; and (+)21.9% to (+)6.5% in H1:2021-22, with risks broadly balanced
  6. Signs of recovery are far from being broadbased and are dependent on sustained policy support.
  7. Surges of capital flows have flooded into India. The RBI has been taking measures for dampening volatility and enabling orderly evolution of the exchange rate in consonance with underlying domestic fundamentals. RBI is mindful of the consequences of these actions for domestic liquidity and inflation. Injections of liquidity through forex interventions are being sterilised by absorptions through the reverse repo. Various instruments at RBI's command will be used at the appropriate time, calibrating them to ensure that ample liquidity is available to the system.
  8. To help banks conserve capital, they need not pay dividends in FY20.
  9. RBI to issue guidelines on Digital Payment Security norms, including prescribing minimum standards for internet and mobile banking.
  10. The RTGS system will soon be made 24×7. With this enablement, it is proposed to reduce settlement and default risk in the system by facilitating settlement of AePS, IMPS, NETC, NFS, RuPay, UPI transactions on all days of the week. This will make the payments ecosystem more efficient.


By Team Cogencis

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