10 takeaways from RBI's MPC meet

Here are the 10 key takeaways from the RBI's first monetary policy meet of the year:

1. The Reserve Bank decided to reduce the policy repo rate by 25 basis point to 6.0% from 6.25% with immediate effect.

2. The reverse repo rate has been revised to 5.75% from 6%. RBI's MPC voted 4:2 in favour of the rate cut, with deputy governor Viral Acharya again dissenting.

3. The MPC also decided to maintain the neutral monetary policy stance. 

4. CPI inflation is revised downwards to 2.4% in Q4:2018-19, from existing 2.8%, much below the RBI's benchmark of 4%.

5. RBI is expecting the normal monsoon in its inflation target.

6. Growth outlook also lowered to 7.2% in FY20 from existing 7.4% on the back of global slowdown.

7. The RBI said the liquidity needs of the system were met through injection of durable liquidity amounting to Rs 37,500 crore in February and Rs 25,000 crore in March through open market purchase operations (OMOs). Consequently, total durable liquidity injected by the Reserve Bank through OMOs aggregated Rs 2,98,500 crore for 2018-19.

8. However, the financial institutions, that have been marred by the liquidity crunch, were expecting a reduction in the SLR and the CRR rates by the central bank.

9. Governor Shaktikanta Das emphasised on the better engagement with the banks for effective transmission of the rates.

10. The MPC noted that the output gap remains negative and the domestic economy is facing
headwinds, especially on the global front. The need is to strengthen domestic growth impulses by spurring private investment which has remained sluggish.

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