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In it's Sixth bi-monthly monetary policy review 2018-19, the six member Monetary Policy Committee (MPC) headed by the Reserve Bank Governor Shakti Kanta Das today lowered the Repo Rate by 25 basis points to 6.25 per cent. This is for the first time since August 2017. Meanwhile, the Reverse repo rate stands adjusted at 6%. Here are the major highlights of the Reserve Bank of India's Sixth bi-monthly monetary policy statement of 2018-19.
Highlights of RBI's 6th bi-monthly monetary policy statement of 2018-19
- This is the first policy review under the newly appointed RBI Governor Shaktikanta Das, who took over after Urjit Patel's exit.Repo rate reduced by 25 basis points, now at 6.25 from 6.5 per cent. RBI cuts benchmark lending rate by 0.25 per cent to 6.25 per cent.
- As per the RBI's statement, "On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to: reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 6.5 per cent to 6.25 per cent with immediate effect."
- RBI has recieved a proposal for an umbrella organisation for urban cooperative banks. RBI has decided on this positively. A decision on the specifics of the umbrella organisation proposal will be taken shortly.
- Monetary policy committee votes 4:2 in favour of rate cut, unanimous on change in stance.
- Export growth on a year-on-year basis was almost flat in November and December 2018, primarily due to a high base effect and weak global demand
- RBI Governor says, "Headline inflation is expected to remain contained below or at its target of 4%. This has opened space for policy action. Investment activity is recovering supported mainly by public spending on infrastructure."
- RBI Governor says, "GDP projection for 2019-20 is 7.4%. The inflation rate is estimated at 3.2-3.4% in the first half of the year 2019-20 and 3.9% in the third quarter of 2019-20."
- RBI has decided enhancement of collateral free agriculture loan from Rs 1 lakh to Rs 1.6 lakhs. This enhancement Rs60,000 has been taken in view of the overall rise in inflation, marginal agriculture input and benefit to small farmers.
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