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Highlights of RBI's monetary policy announcements

Source: PTI
Last updated on: March 29, 2020 12:02 IST
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Following are the highlights of the seventh bi-monthly monetary policy statement for 2019-20 by the RBI amid the covid-19 pandemic:

 

  • Monetary Policy Committee (MPC) advances meeting scheduled for Apr 1-3
  • Repo rate slashed by 75 basis points to 4.4%
  • Reverse repo rate cut sharply by 90 basis points to 4% making unattractive for banks to deposit funds
  • MPC votes unanimously for a reduction in the policy repo rate
  • MPC decides to continue with the accommodative stance as long as it is necessary
  • Committee votes 4:2 in favour of rate cut; unanimous on change in stance
  • 2 MPC members Chetan Ghate and Pami Dua voted for a 50 bps rate cut
  • Several measures taken to infuse liquidity of about Rs 3.74 lakh crore into the financial system
  • RBI to undertake repo operation to infuse Rs 1 lakh crore
  • Cash Reserve Ratio (CRR) cut sharply by 100 bps to 3  per cent releasing Rs 1.37 lakh cr into the system
  • RBI assures to work in mission mode, monitoring the evolving financial market and macroeconomic conditions
  • MPC for the first time advances meeting date and refrains from giving next meeting date in the wake of evolving situation
  • GDP growth rate of 5% for 2019-20 at risk from the impact of pandemic
  • Global slowdown to deepen with adverse implication for India; crude oil slump upside for country
  • Upside growth impulses to emanate from monetary, fiscal measures and the early containment of covid-19
  • Food prices to soften further on back of record foodgrain production
  • MPC refrains from giving out growth, inflation outlook for coming fiscal on uncertain outlook
  • RBI permits all lending institutions to allow 3-month moratorium on payment of installments on term loans
  • Moratorium on term loan, deferring of interest on working capital will not classify as default
  • RBI urges banks and other financial institutions to do all they can to keep credit flowing
  • All instruments -- conventional and unconventional -- on table to support financial stability and revive growth
  • RBI assures that banking system in India safe; deposits safe in private bank; public should not resort to panic withdrawal
  • RBI says macroeconomic fundamental stronger than that in aftermath of 2008 financial market crisis
  • Last tranche of the capital conservation buffer (CCB) for banks deferred for 6 months to September
  • The minutes of the MPC to be published by April 13
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