Highlights of RBI’s monetary policy statement

Following are the highlights of RBI Governor Shaktikanta Das’ statement and resolution of the Monetary Policy Committee (MPC):
* 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 in the flattening of the active caseload curve across the country
* 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
* Current inflation hump transient; agriculture outlook looks bright, oil prices to remain rangebound
* 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.

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