Monetary Policy: 10.5 in April, 9.5% in June, second wave effect on GDP estimates; 8 important things
RBI’s MPC announced, GDP growth estimate was also reduced.
New Delhi:
The Monetary Policy Committee of the Central Reserve Bank announced the new monetary policy on Friday. Giving assurance of maintaining soft monetary policy, the Reserve Bank on Friday kept its policy rate repo at the current level of four percent. At the same time, in view of the pace of the economy affected by the second wave of Corona, the RBI has also reduced the GDP growth estimate. Liquidity facility was given earlier for the health sector. In the same line, this time tourism and hotel-restaurant sector have also been announced to put liquidity for the availability of funds.
Big announcements of RBI
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repo rate The reverse repo rate has been retained at 4 per cent and at 3.35 per cent. This is the sixth consecutive review in which the central bank has not made any change in its one-day lending interest rate-repo. Governor Das said that Financial improvement There has been no change in the policy rates for
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RBI Governor Shaktikanta Das said that in view of the situation arising due to the second wave of Corona, the MPC has decided to maintain the accommodative policy and will do so as long as necessary to support the recovery in the economy. .
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He said that the Reserve Bank has reduced the economic growth forecast from 10.5 percent to 9.5 percent in the current financial year. In April, the RBI had said it possible, keeping an estimate of 10.5 percent, but the second wave of Corona caused so much devastation in the country in April-May that almost every state had to resort to lockdown or similar restrictions. In such a situation, economic activities have been affected again.
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The RBI reduced its economic growth forecast for the current financial year 2021-22 to 9.5 percent from the earlier 10.5 percent amid the second wave of Kovid-19 and the lockdown and curfew imposed in the states to deal with it. The bank said that while the GDP estimate for the financial year is 9.5 per cent, it is 18.5% for the first quarter, 7.9% for the second quarter, 7.2% for the third quarter and 6.6% for the fourth quarter.
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The Reserve Bank estimates that retail inflation will be 5.1 percent in 2021-22. The committee estimates that while the recent fall in inflation has left some room, policy support is needed from all sides to bring economic growth back on track. The governor said that due to weakness in urban demand and spread of corona in rural areas, there may be a negative impact on GDP growth.
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RBI will buy government securities worth Rs 40,000 crore on June 17, as well as buy securities worth Rs 1.20 lakh crore in the second quarter. The Reserve Bank Governor said that we estimate that the country’s foreign exchange reserves have gone above $ 600 billion.
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The Governor said that to mitigate the effects of the second wave, RBI has decided to infuse economy and liquidity. For this, a separate liquidity window of Rs 15,000 crore is being opened. Under which banks will be able to lend to hotel-restaurant, tourism sector etc. This scheme will be applicable till March 31, 2021.
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Apart from this, liquidity facility of 16,000 crore will be given to SIDBI to provide further support to MSMEs.