RBI MPC highlights: 2nd wave has moderated; expect demand to pick up

RBI monetary policy LIVE: The Reserve Bank of India's (RBI's) six-member monetary policy committee, headed by Governor Shaktikanta Das, on Friday kept the benchmark interest rate unchanged amid coronavirus uncertainty and fears over inflation.
The repo rate (lending rate) will continue at 4.00% and reverse repo rate (RBI’s borrowing rate) at 3.35%. With this, the repo rate has remained unchanged for a sixth consecutive time.

 
RBI revised FY22 real GDP growth projection to 9.5% — 18.5% in Q1, 7.9% in Q2, 7.2% in Q3 and 6.6% in Q4. “Unlike the first wave of Covid-19, where economy came to a standstill, economic impact during the second wave will be contained,” the RBI Governor said.

The projection for CPI-based inflation in FY22 is 5.1% — 5.2% in Q1, 5.4% in Q2, 4.7% in Q3 and 5.3% in Q4.

 
Stay tuned for RBI Monetary policy LIVE updates

LIVE UPDATES

MPC has taken conscious decision to focus on growth: RBI

Intervening only in sectors where we see stress, says RBI

Hike in CPI inflation forecasts not important: RBI Governor Shaktikanta Das

Hike in CPI inflation forecasts not important: RBI Governor Shaktikanta Das

Vital to Remain Focused: RBI Governor Shaktikanta Das

"Since the MPC’s April meeting, the second wave of Covid-19 has surged across several states and spread into smaller towns and villages, leaving a trail of human misery and tragedy in its wake. Yet in these days of trials and travails, it is vital to remain focused on vanquishing the virus," said RBI Governor Shaktikanta Das.

Too premature to talk about policy normalisation, says RBI Guv

Too premature to talk about policy normalisation, says RBI Guv

Too premature to talk about policy normalisation, says RBI Guv

Too premature to talk about policy normalisation, says RBI Guv

Gilt yield curve inverted due to abundant liquidity: RBI Governor Shaktikanta Das

Focused on entire yield curve, not just 10-year gilt
Gilt yield curve inverted due to abundant liquidity
Bond yields haven't really gone up. Bond yields look inverted due to abundant liquidity at short end

There is nothing like 6% on 10-year bond is sacrosanct: RBI Guv

Remain focused on orderly evolution of yield curve: RBI Guv
 

Inflation print gives up scope to step up liquidity operations: RBI Guv

Inflation print gives up scope to step up liquidity operations: RBI Guv
 

RBI Monetary policy LIVE: 2nd wave has moderated; expect demand to pick up, says Guv Das

RBI Monetary policy LIVE: 2nd wave has moderated; expect demand to pick up, says Guv Das

RBI will continue with regular liquidity ops, says Guv Shaktikanta Das

RBI will continue with regular liquidity ops, says Guv Shaktikanta Das

RBI creates liquidity window of Rs 15,000 crore to help hotels, tourism

The Reserve Bank of India (RBI) on Friday announced creating a special liquidity window of Rs 15,000 crore with a tenor of 3 years at the repo rate to provide liquidity support to the contact-intensive sectors hit by Covid-19.
 
The special liquidity window encourages banks to provide fresh lending support to hotels, restaurants, tourism, aviation ancillary services, and other services including private bus operators, car repair services, rent-a-car service providers, event/conference organizers, spa clinics, and beauty parlours/saloons.
 
These sectors have seen the biggest impact due to the second wave as authorities started imposing lockdown measures to curb the spread of the virus. Read on...

RBI Policy highlights

Special liquidity facility of Rs 16,000 cr extended to Sidbi to support MSMEs
Banks to be allowed to restructure loans up to Rs 50 crore
RBI to conduct G-SAP of Rs 1.2 trillion in Q2
NACH facility to be available on all days of the week from August 1

RBI Policy highlights

Repo rate unchanged at 4%
'Accommodative' stance retained
FY22 DGP forecast cut to 9.5% from 10.55
CPI inflation seen at 5.1% in FY22

RBI Monetary policy LIVE updates: Rural regional banks can now issue certificates of deposit

RBI Monetary policy LIVE updates: Rural regional banks can now issue certificates of deposit

RBI Monetary policy LIVE updates: RBI's focus turning to equitable distribution of liquidity

It will continue proactive and pre-emptive approach of transmission to return economy to growth: Das
 

Special liquidity facility of Rs 16,000 crore to Sidbi to support MSMEs extended: RBI guv

Rs 1.20 trillion worth of government securities to be purchased in the second quarter: Das
 

RBI Monetary policy LIVE updates: CPI inflation

MPC now sees CPI inflation at 5.1% in 2021-22; 5.2% in Q1, 5.4% in Q2, 4.7% in Q3 and 5.3% in Q4

Coverage of Covid 2.0 recast scheme from Rs 25 crore to Rs 50 crore to cover more MSMEs and small businesses

Resolution Framework 2.0: Coverage of Covid 2.0 recast scheme from Rs 25 crore to Rs 50 crore to cover more MSMEs and small businesses

Rebound in global demand is taking hold, which should strengthen India's export sector: Das

Rebound in global demand is taking hold, which should strengthen India's export sector, says RBI governor Shaktikanta Das

RBI Monetary policy LIVE updates: RBI on measures to support economy

- Futures flows necessitated RBI to intervene with buys, sells in spot & forward market
 
- RBI to use all instruments at its command to support economy
 
- Important to build adequate provisioning & capital buffers

RBI Monetary policy LIVE updates: Governor announces additional measures

On-tap liquidity window of Rs 15,000 cr being opened till May 31, 2022.

Fresh lending support to restaurants, tour operators, conference organisers, spas, beauty parlours, etc. Banks to provide loans at a rate 25 basis points lower that RBI's repo rate.

Forex reserves have already exceeded $600 bn, says RBI governor Shaktikanta Das

Forex reserves have already exceeded $600 bn. That gives us the confidence to deal with global spillovers, whenever that should happen: Das 

RBI Monetary policy LIVE: RBI will purchase Rs 40,000 crore worth of securities under G-SAP 2.0 on June 17

RBI Monetary policy LIVE: RBI will purchase Rs 40,000 crore worth of securities under G-SAP 2.0 on June 17

RBI Monetary policy LIVE updates: G-SAP 2.0 announced

G-SAP operations and some instances of cancellations have conveyed RBI’s views to the market: Das
 

CPI-based inflation is seen at 5.1% FY21-22: Governor Shaktikanta Das

CPI-based inflation is seen at 5.1% FY21-22: Governor Shaktikanta Das
 

RBI Monetary policy LIVE updates: Monsoon expected to expedite economic recovery

RBI Monetary policy LIVE updates: Monsoon expected to expedite economic recovery

RBI Monetary policy LIVE updates: KEY HIGHLIGHTS


RBI Monetary policy LIVE updates: Weak demand, high crude oil rates exerting price pressures

Weak demand, high crude oil rates exerting price pressures, says Shaktikanta Das

RBI Monetary policy LIVE updates: Businesses and individuals are adjusting to the new pandemic situation

Businesses and individuals are adjusting to the new pandemic situation, says Das

Mobility indicators declined in May 2021 but they remain higher than last year: RBI

India's economy is expected to be buoyed by the multiple stimulus packages and acceleration in Covid vaccination
 

RBI Monetary policy LIVE: Rural demand expected to remain robust given the expectation of a good monsoon

RBI Monetary policy LIVE: Rural demand expected to remain robust given the expectation of a good monsoon, says guv Shaktikanta Das

India's real GDP growth is projected at 9.5% in FY22: RBI governor Shaktikanta Das

India's real GDP growth is projected at 9.5% in FY22: RBI governor Shaktikanta Das

RBI Monetary policy LIVE updates: Reverse repo rate retained at 3.35%

MSC, Bank rate unchanged at 4.25%

RBI Monetary policy LIVE: Smaller towns and cities more affected by Covid second wave

RBI to maintain accommodative stance as long as necessary: Governor Das

Covid-19 second wave a cause for concern for the economy: RBI governor Shaktikanta Das

NSO data released on May 31 pegged India's GDP contraction in FY21 at 3%
 

RBI monetary policy LIVE: RBI maintains accommodative stance for now


RBI Monetary policy LIVE updates: RBI keeps repo rate unchanged at 4%

RBI Monetary policy LIVE updates: RBI keeps repo rate unchanged at 4%

RBI Monetary Policy LIVE: If the rates are left unchanged, this would be the sixth consecutive such action

RBI Monetary Policy LIVE: If the rates are left unchanged, this would be the sixth consecutive such action.

RBI Monetary Policy LIVE: Key rates

- Repo rate (lending rate) is likely to continue at 4 per cent and reverse repo rate (RBI’s borrowing rate) at 3.35 per cent.

RBI monetary policy: Bond market expects minimum Rs 1 trn of G-SAP in Q2

The bond market is eagerly waiting for the Reserve Bank of India (RBI) to announce how much it plans to buy in the second quarter under its government securities acquisition programme (G-SAP), and if the second tranche would bring in any conditions.
 
The central bank has plans to buy Rs 1 trillion of bonds under the G-SAP in the first quarter, of which it has already bought Rs 60,000 crore of bonds.
 
Friday’s monetary policy will be the last for the quarter, and therefore, the second quarter numbers are expected to be spelt out in the policy. Read on...

RBI Monetary Policy LIVE: Another moratorium?

Bankers and borrowers policy will closely watch the to see if the central bank comes out with another round of moratorium on loan repayments like last year.
 
The RBI announced in 2020 a repayment moratorium initially for three months and extended it by another three months. The central bank also allowed lenders to invoke a standstill clause, which means classification of the asset would remain unchanged during the period of the moratorium. In other words, the lenders were allowed not to classify any loan as non-performing due to non-payment of dues.
 
“Industry officials have sought a temporary moratorium, for instance automotive dealers and real estate firms, for the duration of the state-specific lockdowns, according to the press reports. Selected banks have also reportedly sought a moratorium for 2Q21 to tide over till 3Q just as the new recast window is being invoked. Inclusion and special concessions for large and mid-tier corporates as well as affected contact intensive industries like aviation, retail sector etc., into the fresh restructuring facility, are reportedly the other demands,” Rao of DBS Bank said.

RBI Monetary Policy LIVE: Bond buying

The central bank, in the April policy, had announced a bond-buying programme from the secondary market. The Government Securities Acquisition Programme (G-SAP 1.0) aimed at enabling a stable and orderly evolution of the yield curve amidst comfortable liquidity conditions, RBI Governor Shaktikanta Das had said.
 
The programme had two rounds of bond purchases for Rs 60,000 crore, out of Rs 1 trillion announced. The market expects the central bank to announce another tranche of bond buying under G-SAP 1.0 on Friday, particularly in the light of a projected fall in revenue collection from GST.
 
“For the bond markets, two rounds of bond purchases under the GSAP 1.0 for the June quarter has added to Rs 600 billion off the total Rs 1 trillion,” said Radhika Rao, economist with DBS Bank.
 
“The next GSAP tranche for the rest of 2Q21 as well as providing an indicative GSAP scale for 3Q21 might be announced this week, just as the government announced plans to increase FY22 borrowings by Rs 1.58 trillion to pay states for an anticipated shortfall in GST revenues. The central bank’s hand will cap risk-free rates at manageable levels and by extension, keep private sector borrowing costs down, by an implicit yield control strategy,” Rao said.

RBI Monetary Policy LIVE: Inflation concern

RBI’s focus has been to support growth since the pandemic last year. It responded with a 75-bps reduction in the policy repo rate in March 2020, reacting days after a nationwide lockdown was announced. In May, the repo rate was reduced again--by 40 bps. Since then, the central bank has maintained a status quo on the interest rates. (1 percentage points is equal to 100 bps)
 
After averaging 6.2% in the 2020-21--which was higher by 140 bps than the previous financial year--consumer price index based inflation (CPI) pressures are again resurfacing in the economy. Rising crude oil prices, supply-side disruptions due to lockdowns and overall recovery will put pressure on inflation. RBI’s annual report six day ago said inflation remained a key concern and constrains the monetary policy to support growth. Read on...

See a realistic chance for the RBI to reduce its earlier growth forecast: Yes Bank economist

Yes Bank chief economist Indranil Pan said, “We do see a realistic chance for the RBI to reduce its earlier growth forecast of 10.5% and highlight increasing risks to the downside. Further, the RBI will continue to pursue its broad intent of plugging weak spots in the economy and ensure adequate liquidity flows to various segments.”

RBI Monetary Policy LIVE: Growth forecast likely to be trimmed

The market will look out for RBI’s GDP growth forecast for the financial year. In the last policy review meeting of April, GDP growth for the current financial year was projected at 10.5%. For the first quarter, it was projected at 26.2%. The prediction was before the second wave of the coronavirus pandemic that has hurt economic activity due to lockdowns by state governments. Most economists and rating agencies have trimmed their forecast following the second wave. Many see GDP growth for FY22 in single digit now, as compared to double-digit predictions made before the second wave.
 
“RBI is expected to revise growth projections downward but not significantly,” Anubhuti Sahay, head of economic research, South Asia, Standard Chartered Bank.
 
“We are at 8.5% as compared to the 10.2% projected earlier. (FY22) The RBI will possibly keep FY22 GDP growth projections between 9-9.5%,” Sahay told 'Business Standard'. Read on...

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