Highlights of RBI’s monetary policy statement : 09-10-2020

Following are the highlights of RBI Governor Shaktikanta Das’ statement and resolution of the Monetary Policy Committee (MPC):

* Benchmark lending rate kept unchanged at 4 pc

* Indian economy expected to contract 9.5 pc this fiscal with downside risks

* Contraction 9.8 per cent projected in July-September; 5.6 pc in October-December and rebound in growth at 0.5 per cent in March quarter

* GDP growth for April-June quarter 2021-22 fiscal projected at 20.6 pc

* Accommodative monetary policy stance maintained to support growth

* Indian economy entering into decisive phase in fight against coronavirus, focus must shift from containment to reviving economy

* Contraction in economic growth of Q1 behind; silver linings are visible

* GDP growth may break out of contraction and enter positive zone by March quarter of current fiscal

* Inflation to remain elevated in September quarter, but ease gradually towards the target over December and March quarters

* Current inflation hump transient; agriculture outlook looks bright, oil prices to remain rangebound

* RTGS fund transfer system for real-time fund transfer to become 24X7 from December

* Threshold for aggregate exposure of retail bank loans to one counterparty increased to Rs 7.5 crore from Rs 5 crore

* System-based automatic caution-listing for exporters discontinued to help them negotiate better terms with overseas buyers

* Comfortable liquidity position to be maintained; Rs 20,000 crore-OMO auction next week

* On-tap targeted long-term repo operations (TLTRO) to be conducted, with tenors of up to three years for Rs 1 lakh crore at a floating rate linked to the policy repo rate up to March 31, 2021

* All MPC members vote for keeping the policy repo rate unchanged and continue with the accommodative stance.

Source : Financial Express