RBI MPC interaction Highlights: Depending on the lockdown-like situation, we will decide on innovative financial measures

The Reserve Bank of India (RBI) has kept the repo rate unchanged at 4%, maintaining an accommodative stance. The reverse repo rate stands at 3.35%. RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) kept its estimate for economic growth unchanged at 10.5 per cent for the current fiscal.

On whether more relief instuments will be announced after Maharashtra resrictions

Lockdowns are selective. Growth is not going to be impacted this time. Manufacturing units - large, small and medium are functional. Growth outlook is reiterated at 10.5% projection. I don't think, the growth is undermined. There is uncertainty, but overall we are better prepared to continue with economic activities. There is no impediment except restaurants and hotels. Whatever guidance we have given looks very much appropriate. We have made certain reasonable assumptions as to how the situation is going to play out. we are watchful and taken into consideration the likely scenario that is likely to unfold," Das said.

Moratoriums, rate cuts are traditional formats, we will have to innovate as we go along if the situation worsens, but that cannot be ascertained now, Das clarified.

"Private businesses are better prepared this time. We cannot commit on the policy decisions at this stage. Depending on the situation, we will decide on innovative measures -- both conventional and unconventional. There is no need for any moratoriums at this juncture," he added.

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RBI will ensure orderly evolution of yield curve: Das

G-SAP is in addition to normal instruments dor liquidity management: das

G-SAP is different from the usual OMO calendar

At this time, what is your immediate priority for the middle-class? To support investment avenues?

How the middle class will invest and in what insturuments, is not for us to say but we are now in a better place than when we enetered the pandemic and growth, financial stability is of paramount importance, says Das

RBI Governor on the second wave of pandemic

We have faced the challenge quite well. We entered the pandemic much better last year. Macro economic numbers are robust. Financial stability is preserved. As a country we have done reasonably well. Monetary authorities and fiscal authorities are better prepared to face the new wave of Covid pandemic and we should be able to deal with it all responsibility.

We have done reasonably well despite the pandemic, says Das

CPI forecast is above 4% running this fiscal, does an accomodative stance extend to the reverse Repo Rate?

The statement gives forward-looking outlook. Inflation targeting framework is well-entrenched, expectations also well-anchored. The current framework gives enough space to RBI to act in situations like the pandemic. The outlook is uncertain, but we have given out projections. Growth is of paramount importance so is inflation targeting, therefore reverse Repo rate has not been spoken about currently, says Das

Whenever the system is in Reverse Repo, policy is accomodative, cites Deputy Governor

Is it possible to hike accomodative Repo Rate with hike in rates? Question to Das

At this point of time, we have said what we had to say, at what time we will exit and whether reverse Repo Rate can be seen differently, remains to be seen for the future: RBI Governor

Will intervention through G-SAP will be different?

G-Sap will run general alongside operatioons: Deputy Governor Patra.
It has been planned into the liquidity framework for 21-22

We have explicitly defined ample liquidity. Enough liquidity in the market: Das

Banks turn RBI’s hot-money move into lucrative currency trade

The Reserve Bank of India’s attempt to flush out excess US dollars from the nation’s markets has offered a unique arbitrage opportunity for some banks.

Lenders are using a regulatory loophole to profit from trading in the currency forward markets, according to people with knowledge of the matter. A large bank could easily rack up exposures of more than $1 billion, multiple traders said, asking not to be identified as the deals aren’t public.

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Sensex climbs 300 points after RBI policy outcome, Nifty jumps over 14,750 level

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RBI revises projected CPI inflation to 5.2% in Q1 FY22

RBI Governor Shaktikanta Das on Wednesday said that projection for CPI inflation has been revised to 5% in Q4 of 2021. 5.2% CPI inflation can be expected in Q1 and Q2 of 2021-22. Inflation was also revised to 4.4% in Q3, and 5.1% in Q4.

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RBI maintains FY22 GDP growth rate forecast at 10.5%

The Reserve Bank of India has decided to maintain its GDP growth rate forecast for the nation at 10.5% despite a second wave of the Covid-19 pandemic.

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The RBI has slashed the repo rate by a total of 115 basis points (bps) since March 2020 to soften the blow from the pandemic. This follows 135 bps worth of rate cuts since the beginning of 2019.

The MPC has cut the repo rate by 250 basis points since February 2019. A status quo on rates and stance was expected by most of the economists and market analysts.

MPC saw inflation edging up to 5.2 per cent in the first half of the new fiscal from 5 per cent in the January-March period and moderate to 4.4 per cent in Q3 of FY22.