MPC Meet Live Updates: Reserve Bank kept the repo rates unchanged at four per cent
Reserve Bank of India (RBI) Governor Shaktikanta Das is announcing the policy decision today, at the end of the scheduled review of the Monetary Policy Committee (MPC) that began on Wednesday, June 2, as it evaluates the economic impact amid the severity of the second wave of the COVID-19 pandemic. The Reserve Bank’s monetary policy unanimously voted to maintain the repo rates – the key interest rates at which the RBI lends money to commercial banks – steady at four per cent. The reverse repo rate – the rate at which RBI borrows money from banks, was also unchanged at 3.35 per cent. (Also Read: RBI Keeps Lending Rate At 4%, Projects Real GDP Growth This Year At 9.5% )
This is the second bi-monthly monetary policy review for the financial year 2021-22, at a time when the economy witnessed a record contraction of 7.3 per cent for the previous fiscal 2021, recording its worst-ever performance in over four decades.
Even as India has recorded around 2.8 crore covid-19 cases since last year, and over 3 lakh casualties, some analysts believe that the worse may be over as states have begun cautious unlocking, amid initial signs that the peak of the second covid curve may have subsided.
Here are all live updates from today’s RBI Governor Shaktikanta Das-led Monetary Policy Committee meeting:
“The announcements on policy rates, stance, and liquidity management was as per expected. The announcements on G-SAP 1.0 and G-SAP 2.0 are in line expectations too. Markets could be slightly disappointed with the last tranche of GSAP 1.0 including SDL within the Rs400 bn limit, especially, after the announcement of a possible Rs 1.58 tn borrowing by center as back-to-back loans to the states. However, this would be a policy that is in line with market’s expectations,” said Suvodeep Rakshit, Vice President & Senior Economist at Kotak Institutional Equities.
RBI Monetary Policy LIVE: RBI to purchase G-Sec worth Rs 40,000 under GSAP 1.0 Programme
Under the G-SAP 1.0 programme, the Reserve Bank of India will purchase the remaining Rs 40,000 crore worth of government securities on June 17. RBI Governor Shaktikanta Das in the policy meet, said that out of this, Rs 10,000 crore would constitute purchase of state development loans or SDLs.
“The policy statement has been in line with our expectations with RBI having revised down its GDP forecasts while providing assistance to the stressed sectors. The RBI also has revised the inflation trajectory marginally higher given the concerns on pass through of higher input prices…Given that SDL purchases are also included in the last tranche of GSAP 1.0, suggesting a similar inculsion in GSAP 2.0, it may be marginally negative for the G-sec markets given that a higher purchase was expected in order to offset the supply concerns emanating from the higher G-sec issuance expected to meet the GST compensation cess shortfall to the states. Needless to say the pressure on states’ finances is increasing and hence the support from RBI is likely to ease the SDL yields marginally,” said Upasna Bhardwaj, Senior Economist at Kotak Mahindra Bank.
RBI Monetary Policy LIVE: RBI cuts down quarterly GDP estimates for fiscal 2021-22
RBI Governor Shaktikana Das said that GDP growth is now projected at 9.5 per cent in current financial year 2021-22. The central bank projected GDP growth of18.5 per cent in the first quarter, 7.9 per cent in the second quarter, 7.2 per cent in the third quarter; and 6.6 per cent in the fourth quarter of current fiscal
The Reserve Bank has decided to undertake the G-SAP 2.0 in the second quarter of this financial year and conduct secondary market purchase operations of Rs 1.2 lakh crore to support the market.
RBI Monetary Policy LIVE: RBI opens Special liquidity window of Rs 15,000 crore
RBI Governor while addressing the policy meet, said that the central bank will open a special liquidity window of Rs 15,000 crore till March 30, 2022, with tenors of up to three years at the repo rate. Under this banks can provide lending support to hotels, restaurants, travel firms, aviation ancillary services and other services that include private bus operators, car repair services, spa, as well as saloons.
RBI Governor Shaktikanta Das said that the RBI will conduct operations for the remaining Rs 40,000 crore under GSAP 1.0 on June 17.
In the Monetary Policy Committee meet, the Reserve Bank of India trimmed the gross domestic product (GDP) growth projections for the financial year 2021-22 from 10.5 per cent to 9.5 per cent
The Reserve Bank of India projected the retail inflation at 5.1% for fiscal year 2021-22. The central bank projected inflation for first quarter at 5.2 per cent, 5.4 per cent in second quarter, 4.7 per cent in third quarter, and at 5.3 per cent in the fourth quarter in the current financial year.
RBI Governor Shaktikanta Das explained that the resilience of the agri, forecast of monsoon, and the gathering momentum of the global economy could help the domestic economy as the second wave of the pandemic tapers.
RBI Monetary Policy LIVE: Reserve Bank Maintains Accommodative Stance
Shaktikanta Das-led Monetary Policy Committee has maintained its accommodative stance in an effort to continue supporting the revival of the economy amid the COVID-19 crisis.
RBI Monetary Policy LIVE: Monetary Policy Committee Keeps Lending Rates Unchanged
The Reserve Bank’s monetary policy maintained the repo rates – the key interest rates at which the RBI lends money to commercial banks – steady at four per cent. The reverse repo rate – the rate at which RBI borrows money from banks, was also unchanged at 3.35 per cent.
RBI Monetary Policy LIVE: RBI Governor Shaktikanta Das begins monetary policy address
RBI Governor Shaktikanta Das began addressing the monetary policy statement at 10:00 am on Friday, June 4. A post policy press conference will be telecast at 12:00 noon today
“With the second wave of COVID – 19 that has brought about a new phase of economic uncertainties, we expect RBI to remain growth supportive and leave the policy interest rates unchanged in the upcoming policy. While rise in commodity prices have been exerting an upward pressure on input material cost and on margins, the Central Bank at the current juncture should not risk increasing the borrowing cost. With the second wave of the pandemic, economy is in a vulnerable condition and would require further policy support from the Central Bank and the Government,” said Mr. Shishir Baijal, Chairman & Managing Director, Knight Frank India.
RBI Monetary Policy LIVE Updates: Banking Stocks In Focus Today
The shares of private banks and PSU are likely to be focus today amid market hours, as the Reserve Bank announced key decisions on interest rates, liquidity measures. Ahead of the policy announcement, the stock markets opened on a cautious note. At 9:53, the BSE Sensex was trading 52,278.05 higher by 19 points
RBI Monetary Policy LIVE Updates: Traders await decisions under G-SAP 2.0
The Reserve Bank of India, in its first bi-monthly meeting for the current fiscal, committed to buying Rs 1 lakh crore ($13.71 billion) worth of government bonds from the market between April-May in a quantitative easing program it called G-SAP 1.0. Traders now look to see whether the central bank will announce potentially more aggressive bond purchases under a G-SAP 2.0 programme, and are also eyeing any revisions to growth and inflation forecasts. The market expectations for larger bond-buying are high after the government recently increased its borrowing for this year.
”The current focus of the MPC is to support the fragile economy and the financial system from the damage inflicted by the second wave of Covid and to bring it back again on a healthy recovery path over the next few quarters…There is a need to pursue a similar monetary and fiscal policy framework over the next 2-3 quarters as we witness the tapering of the second Covid wave. We expect the policy stance to remain unequivocally accommodative throughout the current financial year.
While there is virtually no scope for a further cut in interest rates given the increased commodity prices and the rising WPI, the status quo on rates is likely to continue for a longer time possibly till the end of FY22. Despite the risks of a build up of inflationary pressures in the near term, RBI is likely to give higher priority to the concerns around growth recovery,” said Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research.
RBI Monetary Policy LIVE Updates: GDP growth retained at 10.5% in last meeting
In the last bi-monthly meet held in April, the central bank expected the gross domestic product (GDP) growth to be at 10.5 per cent in fiscal 2021-22. The real GDP growth was projected at 22.6 per cent in first quarter of current fiscal, 8.3 per cent in second quarter, 5.4 per cent in third quarter, and 6.2 per cent in the fourth quarter
“While policy rates are likely to be unchanged, it will be key to see if RBI MPC suggests any changes to growth forecast. Q1 FY 22 so far has been muted given the pandemic and resultant localised lockdowns. Bond markets would also be eager to see GSAP 2.0 announcement for Jul- Sep quarter, as government bond supply may not be met with commensurate demand. Bottomline, despite inaction on rates front, walk the talk will be key to market movement post policy,” said Lakshmi Iyer, CIO (Debt) & Head Products, Kotak Mutual Fund
RBI Monetary Policy LIVE Updates: RBI May keep key lending rates unchanged
In a recent poll by news agency Reuters, all 51 economists who took part in the survey said that the central bank is likely to keep interest rates at record lows, as it assesses the economic crisis amid the second wave of the COVID-19 pandemic. However, the monetary authority is expected to reiterate its commitment on liquidity.
RBI Monetary Policy LIVE Updates: RBI Governor To Deliver Monetary Policy Address At 10:00 AM
Reserve Bank of India (RBI) Governor Shaktikanta Das will deliver the Monetary Policy review statement at 10:00 am today (June 4, 2021). The central bank Governor will also address a post-policy press conference at 12 noon.
RBI Monetary Policy LIVE: RBI Monetary Policy Decision Today
Reserve Bank of India (RBI) Governor Shaktikanta Das will announce the second bi-monthly Monetary Policy Committee (MPC) statement of the financial year 2021-22 today
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