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Reserve Bank of India Governor Shaktikanta Das. (Reuters)
Reserve Bank of India Governor Shaktikanta Das. (Reuters)

RBI Monetary Policy: Shaktikanta Das leaves repo rate unchanged

  • RBI Governor has left repo rate unchanged and maintained an accommodative stance
  • For the year 2020-21, real GDP growth is estimated to be negative, RBI said

NEW DELHI : After a three-day meeting of the Monetary Policy Committee (MPC), RBI Governor Shaktikanta Das today announced that the key repo rate will be kept unchanged at 4%. RBI has already cut interest rates by 115 basis points this year, taking the repo rate down to 4%, the lowest since it was introduced in 2000.

RBI Governor Shaktikanta Das Speech Updates:

-To enhance safety of cheque payments, it has been decided to introduce a mechanism of Positive Pay for all cheques of value 50,000 and above. This will cover approximately 20 per cent and 80 per cent of total cheques by volume and value, respectively. Operational guidelines in this regard will be issued separately: RBI

-RBI will set up an innovation hub: Das

-Priority sector lending is also being given to startups: RBI

-Stressed MSME borrowers will be eligible for debt restructuring: RBI

-RBI is now announcing additional measures to enhance liquidity support, ease financial stress, improve flow of credit and deepen digital payment system.

-Additional special liquidity will be provided to NABARD, National Housing Bank

-Mutual funds have stabilised since the Franklin Templeton episode: RBI

-Supply chain disruptions persist; inflation pressures evident across segments: RBI

-Economic activity had started to recover, but surge in infection has forced imposition of lockdowns: RBI Governor Shaktikanta Das

-Real GDP growth is estimated to be negative for 2020-21.

-Inflation remain elevated in the second quarter but it is likely to ease. Recovery in rural economy expected to be robust: Das

-Imports fell sharply in June: Das

- Shaktikanta Das said global economic activity has remained fragile.

-RBI has maintained an accommodative stance

-Repo rate remains unchanged at 4%: RBI

-Das begins speech.

-"Any measures to support the economy or certain stressed out sectors are expected," said Mayuresh Joshi, head of equity research for India at William O'Neil in Mumbai, adding it could include a one-time restructuring of loans for banks saddled with bad debt.

-Investors will also see if the RBI extends a moratorium on loan repayments to banks, which analysts have said could worsen asset quality of lenders.

-The RBI’s target is to keep inflation in a range of 2%-6%, but consumer-price growth has exceeded the upper end of that band for most of the past two quarters.

-Of the 44 economists surveyed by Bloomberg, 22 expect a 25 basis-point rate cut on Thursday, one projects a 50-point move and the rest see no change.

-"The focus is on restructuring. Finance ministry is actively engaged with RBI on this. In principle, the idea that there may be a restructuring required, is well taken," Finance Minister Nirmala Sitharaman had said last week.

-A Mint survey had showed that six out of 10 bankers polled expect RBI to keep policy repo rate on hold at 4%, while the rest are expecting a 25 basis points cut

-This is the 24th meeting of RBI's monetary policy committee.

-Shaktikanta Das will begin his speech at 12 noon.

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