RBI Monetary Policy: Shaktikanta Das has already promised more policy measures to support growth
The Reserve Bank of India (RBI) left the repo rate unchanged at the existing 4 per cent on Thursday, following a three-day meeting of its six-member Monetary Policy Committee (MPC). The Monetary Policy Committee decided unanimously to leave the repo rate at the existing level, and maintain its "accommodative" stance on policy, Governor Shaktikanta Das said in a virtual address to media. An accommoative stance rules out any increases in the near term. The RBI Governor said the Monetary Policy Committee expects inflation to remain at elevated levels in the July-September period, and ease in second half of the current financial year on account of "favourable base effect".
Here are latest updates on the RBI's monetary policy decision:
At this juncture, war against COVID-19 most intense: Shaktikanta Das
The RBI Governor said the war against COVID-19 is most intense at the current juncture.
The RBI Governor said the war against COVID-19 is most intense at the current juncture.
RBI Governor Shaktikanta Das Announces Additional Measures
Regulatory response has to be dynamic, pro-active and balanced: RBI Governor Shaktikanta Das
Regulatory response has to be dynamic, pro-active and balanced: RBI Governor Shaktikanta Das
RBI Leaves Repo Rate Unchanged At 4%
The Reserve Bank of India on Thursday left the repo rate unchanged at 4 per cent. The central bank also maintained the reverse repo rate - the interest rate at which the RBI borrows funds from commercial banks - unchanged at 3.35 per cent.
The Reserve Bank of India on Thursday left the repo rate unchanged at 4 per cent. The central bank also maintained the reverse repo rate - the interest rate at which the RBI borrows funds from commercial banks - unchanged at 3.35 per cent.
Banking Stocks Mixed Ahead Of RBI Policy Statement
The Nifty Bank index - comprising stocks of the country's 12 major lenders - was last seen trading 0.10 per cent lower, having risen as much as 0.79 per cent earlier.
At 11:55 am, HDFC Bank traded 0.68 per cent higher, SBI was up 0.13 per cent, whereas IndusInd Bank and ICICI Bank were down 1.18 per cent, 0.57 per cent and 0.35 per cent respectively.
The Nifty Bank index - comprising stocks of the country's 12 major lenders - was last seen trading 0.10 per cent lower, having risen as much as 0.79 per cent earlier.
At 11:55 am, HDFC Bank traded 0.68 per cent higher, SBI was up 0.13 per cent, whereas IndusInd Bank and ICICI Bank were down 1.18 per cent, 0.57 per cent and 0.35 per cent respectively.
Sensex Up Over 200 Points, Nifty Holds 11,150 Ahead Of RBI Decision
Domestic stock markets registered mild gains ahead of the release of the RBI's monetary policy statement. At 11:43 am, the S&P BSE Sensex index traded 220.45 points - or 0.59 per cent - higher at 37,883.78, while the broader NSE Nifty 50 benchmark was at 11,168.90, up 67.25 points - or 0.61 per cent - from its previous close.
Rate-sensitive stocks - such as banking and automobiles - turned flat, having moved on a mixed note earlier on Thursday.
RBI To Release Policy Statement Shortly; Inflation In Focus
Traditionally, the RBI has focused on keeping consumer inflation - or the rate of increase in retail prices of a basket of commodities - under control, within a +/-2 per cent range of a medium-term target of 4 per cent.
However, in June, retail inflation soared to 6.09 per cent amid a jump in the prices of food items, especially meat, cereals and pulses, from 5.84 per cent in March - the nearest comparable month.
RBI Sees Gross Bad Loans Worsening To 12.5% By March
In a report released last month, the RBI said the coronavirus pandemic is likely to push up the gross non-performing assets - or bad loans - in the country's banking system to at least 12.5 per cent by March 2021, from 8.5 per cent in March 2020.
RBI Governor Shaktikanta Das, in his foreword to the report by the Financial Stability and Development Council, highlighted the uncertainty to economic growth, but said once the post-pandemic phase was reached the focus would be on calibrated unwinding of regulatory and other dispensations.
RBI Has Already Shifted Focus To Financial Stability
Under Governor Shaktikanta Das, the Reserve Bank of India's recent policies have focused on financial stability and the need to support growth.
The country was placed under one of the strictest lockdowns in the world in late March for over two months to halt the spread of the coronavirus pandemic.
RBI Likely To Cut Repo Rate Despite Inflationary Pressures: Poll
Around two-thirds of economists in a poll by news agency Reuters expect the Reserve Bank of India to reduce the repo rate by 25 basis points to 3.75 per cent today, and once more next quarter to a record low of 3.50 per cent.
Currently, the repo rate stands at 4 per cent, the lowest since 2000. (RBI Likely To Cut Lending Rates Despite Inflation Risk: Poll)
RBI Has Already Cut Repo Rate By 1.15 Percentage Point Since February
The Reserve Bank of India (RBI) has already reduced the repo rate - or the key interest rate at which it lends short-term funds to commercial banks - by a total of 115 basis points since February, on top of the 135 basis points last year, responding to slowing growth.
Most analysts expect a reduction of at least 25 basis points in the key lending rate today.
RBI Governor Shaktikanta Das To Address Media At 12:00 Noon
This is the first scheduled bi-monthly review by the Reserve Bank of India's six-member Monetary Policy Committee since February.
The RBI's six-member Monetary Policy Committee has already met twice outside its bi-monthly cycle, first in March and then in May.
This is the first scheduled bi-monthly review by the Reserve Bank of India's six-member Monetary Policy Committee since February.
Watch out for Bi-monthly Monetary Policy address by RBI Governor @DasShaktikanta at 12:00 hrs on August 06, 2020 #rbitoday#rbigovernor
- ReserveBankOfIndia (@RBI) August 6, 2020
YouTube: https://t.co/ioXHI7kdUB
Twitter: @RBI
@RBIsayshttps://t.co/X2ON7F8SCw
RBI Policy Statement Due At 11:45 AM
The Reserve Bank of India will release its policy statement at 11:45 am. Analysts are divided over whether the RBI will announce a rate cut to aid the economy despite inflationary pressures. Governor Shaktikanta Das will address the media virtually 15 minutes after the release of policy statement.
The Reserve Bank of India will release its policy statement at 11:45 am. Analysts are divided over whether the RBI will announce a rate cut to aid the economy despite inflationary pressures. Governor Shaktikanta Das will address the media virtually 15 minutes after the release of policy statement.
