Reserve Bank of India (RBI) Governor Shaktikanta Das introduced the coverage resolution these days, on the finish of the scheduled assessment of the Monetary Policy Committee (MPC) that started on Wednesday, June 2, because it evaluates the commercial affect amid the severity of the second one wave of COVID-19. The Reserve Bank’s financial coverage unanimously voted to handle the repo charges – the important thing rates of interest at which the RBI lends cash to industrial banks – stable at 4 consistent with cent. The opposite repo fee – the speed at which RBI borrows cash from banks, used to be additionally unchanged at 3.35 consistent with cent. (Also Read: RBI Keeps Lending Rate At 4%, Projects Real GDP Growth This Year At 9.5% )
The central financial institution has maintained its establishment on key coverage charges for the 6th time in a row, proceeding with the accommodative stance so long as essential to restore financial expansion on a sturdy foundation. The RBI focused retail inflation at 5.1 consistent with cent within the present monetary yr 2021-22.
The RBI Governor additionally introduced the secondary marketplace govt securities acquisition programme – G-SAP 2.0 of Rs 1.2 lakh crore in the second one quarter of the present fiscal yr. The central financial institution additionally reduce down the gross home product (GDP) expansion projection for the present fiscal from 10.Five consistent with cent to 9.Five consistent with cent.
This is the second one bi-monthly financial coverage assessment for the monetary yr 2021-22, at a time when the economic system witnessed a report contraction of seven.Three consistent with cent for the former fiscal 2021, recording its worst-ever efficiency in over 4 many years.
Even as India has recorded round 2.Eight crore COVID-19 instances since remaining yr, and over Three lakh casualties, some analysts consider that the more severe could also be over as states have begun wary unlocking, amid preliminary indicators that the height of the second one covid curve can have subsided.
Here are highlights from these days’s RBI Governor Shaktikanta Das-led Monetary Policy Committee assembly:
”Measures to improve liquidity improve to maximum inclined contact touchy sectors and small companies; and expanded credit score publicity prohibit for solution is a smart transfer. As the country makes an attempt to recuperate from the second one wave of pandemic, there’s a dire wish to supply financial coverage improve – as a result of each simple availability and cheaper price of price range – to families and companies alike.
Besides the financial coverage intervention, as we pop out of graded regional lockdowns and extra resume financial actions, there’s a better wish to supply ok fiscal improve to leap beginning intake call for. Demand stimulant measure like credit score subsidy or tax waivers even for a restricted length can play a transformative function till we achieve the pre COVID-19 normalcy thresholds,” stated Mr. Shishir Baijal, Chairman & Managing Director, Knight Frank India.
On Friday, June 4, the rate-sensitive banking stocks equivalent to ICICI Bank, HDFC Bank, Axis Bank, State Bank of India slipped round one consistent with cent each and every in a subdued marketplace after the Reserve Bank of India (RBI) maintained establishment on rates of interest all through the second one bi-monthly financial coverage resolution of fiscal 2022.
The Reserve Bank of India took steps to inspire investments through Foreign Portfolio Investors (FPIs) within the Indian debt marketplace. In order to ease operational constraints confronted through FPIs, RBI has now accepted licensed broker banks to position margins on behalf in their FPI shoppers for his or her transactions in govt securities, together with state building loans in addition to treasury expenses, inside the credit score chance control framework of banks.
“RBI’s bigger move was with regards to yield management as the RBI stressed on smooth liquidity management and orderly G-sec borrowings, with a more vocal and defined G-SAP. Of the residual Rs 400 bn G-SAP 1.0 , around Rs 100 bn will be allocated to SDLs, while the G-SAP 2.0 amount will be higher at Rs 1.2 tn for 2QFY21. This would further ensure lower sovereign risk premia ahead amid elevated borrowing calendar this year,” said Ms. Madhavi Arora, Lead Economist, Emkay Global Financial Services
The National Automated Clearing House or NACH, a bulk payment system operated by the NPCI, facilitates the one-to-many credit transfers such as payment of dividend, interest, salary, pension, etc., as also the collection of payments pertaining to electricity, gas, telephone, water, periodic instalments towards loans, investments in mutual funds, insurance premium, etc. The RBI has now leveraged the 24×7 availability of RTGS, NACH which is currently available on bank working days, to be made available on all days of the week, with effect from August 1, 2021.
The Resolution Framework 2.0 was announced by the Reserve Bank on May 5, 2021, provides for resolution of COVID-19 related stress of MSMEs as well as non MSME small businesses, and loans to individuals for business purposes. In order to enable a larger set of borrowers to avail of the benefits under Resolution Framework 2.0, RBI decided to expand the coverage of borrowers under the scheme by enhancing the maximum aggregate exposure threshold from Rs 25 crore to
Rs 50 crore.
RBI Monetary Policy LIVE: RBI Governor Shaktikanta Das To Address Post-Policy Press Conference
RBI Governor Shaktikanta Das will address a post-policy press conference at 12 noon today. He will address queries related to the bi-monthly Monetary Policy Committee decisions taken today and other key decisions announced by the authority.
”The RBI expectedly stayed the course and kept key policy rates and policy stance unchanged. The GSAP 2.0 bond-buying program worth Rs 1.2 lakh crore will ensure system liquidity and smooth government borrowing for the current financial year.
The central bank’s focus on growth, assuring proactive, preemptive policy support till growth stabilizes will positively impact the market sentiment. The sector-specific approach to provide liquidity support from healthcare to hospitality will ensure a quick recovery, arrest job losses in the affected sectors. Raising the limit for MSME loan restructuring is a big positive given the impact the sector has on the broader economy,” said Mr. Nish Bhatt, Founder & CEO, Millwood Kane International – an Investment consulting firm.
RBI Governor Shaktikanta Das aid India’s forex reserves may have crossed record level of $ 600 billion on the back of robust capital flows. As per the RBI’s data issued on May 28, the country’s foreign exchange reserves rose to $ 2.865 billion to a record high of $ 592.894 billion for the week ended May 21, driven by gold and currency assets.
The Reserve Bank of India extended a fresh support of Rs 50,000 crore on April 7, 2021 to All India Financial Institutions (AIFIs) for new lending in 2021-22. This included Rs 15,000 crore to the Small Industries Development Bank of India (SIDBI). In order to support the funding requirements of micro, small and medium enterprises (MSMEs), the RBI decided to extend a special liquidity facility of Rs 16,000 crore to SIDBI for on-lending or refinancing through models and structures.
“The bulletins on coverage charges, stance, and liquidity control used to be as consistent with anticipated. The bulletins on G-SAP 1.Zero and G-SAP 2.Zero are in line expectancies too. Markets may well be rather disenchanted with the remaining tranche of GSAP 1.0 together with SDL inside the Rs400 bn prohibit, particularly, after the announcement of a conceivable Rs 1.58 tn borrowing through middle as back-to-back loans to the states. However, this is able to be a coverage this is in keeping with marketplace’s expectancies,” stated Suvodeep Rakshit, Vice President & Senior Economist at Kotak Institutional Equities.
RBI Monetary Policy LIVE: RBI to buy G-Sec value Rs 40,000 underneath GSAP 1.0 Programme
Under the G-SAP 1.Zero programme, the Reserve Bank of India will acquire the rest Rs 40,000 crore value of presidency securities on June 17. RBI Governor Shaktikanta Das within the coverage meet, stated that out of this, Rs 10,000 crore would represent acquire of state building 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 one wave of COVID – 19 that has led to a brand new section of financial uncertainties, we think RBI to stay expansion supportive and depart the coverage rates of interest unchanged within the upcoming coverage. While upward push in commodity costs were exerting an upward power on enter subject material value and on margins, the Central Bank on the present juncture must now not chance expanding the borrowing value. With the second one wave of the pandemic, economic system is in a inclined situation and will require additional coverage improve from the Central Bank and the Government,” stated Mr. Shishir Baijal, Chairman & Managing Director, Knight Frank India.
RBI Monetary Policy LIVE Updates: Banking Stocks In Focus Today
The stocks of personal banks and PSU usually are focal point these days amid marketplace hours, because the Reserve Bank introduced key selections on rates of interest, liquidity measures. Ahead of the coverage announcement, the inventory markets opened on a wary be aware. At 9:53, the BSE Sensex used to be buying and selling 52,278.05 upper through 19 issues
RBI Monetary Policy LIVE Updates: Traders look ahead to selections underneath G-SAP 2.0
The Reserve Bank of India, in its first bi-monthly assembly for the present fiscal, dedicated to shopping for Rs 1 lakh crore ($13.71 billion) value of presidency bonds from the marketplace between April-May in a quantitative easing program it referred to as G-SAP 1.0. Traders now glance to peer whether or not the central financial institution will announce doubtlessly extra competitive bond purchases underneath a G-SAP 2.Zero programme, and also are eyeing any revisions to expansion and inflation forecasts. The marketplace expectancies for better bond-buying are top after the federal government not too long ago higher its borrowing for this yr.
”The present focal point of the MPC is to improve the delicate economic system and the monetary machine from the wear inflicted through the second one wave of Covid and to carry it again once more on a wholesome restoration trail over the following couple of quarters…There is a wish to pursue a an identical financial and monetary coverage framework over the following 2-Three quarters as we witness the tapering of the second one Covid wave. We be expecting the coverage stance to stay unequivocally accommodative during the present monetary yr.
While there’s just about no scope for an additional reduce in rates of interest given the higher commodity costs and the emerging WPI, the established order on charges is prone to proceed for an extended time in all probability until the top of FY22. Despite the dangers of a increase of inflationary pressures within the close to time period, RBI is most likely to offer upper precedence to the worries round expansion restoration,” stated Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research.
RBI Monetary Policy LIVE Updates: GDP expansion retained at 10.5% in remaining assembly
In the remaining bi-monthly meet held in April, the central financial institution anticipated the gross home product (GDP) expansion to be at 10.Five consistent with cent in fiscal 2021-22. The actual GDP expansion used to be projected at 22.6 consistent with cent in first quarter of present fiscal, 8.Three consistent with cent in 2d quarter, 5.Four consistent with cent in 3rd quarter, and six.2 consistent with cent within 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 one bi-monthly Monetary Policy Committee (MPC) commentary of the monetary yr 2021-22 these days