Top highlights from RBI’s Monetary Policy Committee meet

MPC voted for keeping interest rate unchanged and continued with its accommodative stance to support growth.

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

RBI Governor Shaktikanta Das (REUTERS)

• 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

• Retail inflation projected at 6.8 per cent for September quarter

• 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.