Key Highlights:

  • RBI Maintained an accommodative stance.
  • RBI Leaves Repo Rate unchanged at 4%.
  • Reverse repo rate remains unchanged at 3.35%.
  • CRR is maintained at 4%
  • Real GDP Growth is projected at 9.5% as compared to previous projection of 10.5% in 2021-2022. Growth is seen at 18.5% in Q1, 7.9% in Q2, 7.2% in Q3 and 6.6% in Q4. This compares to a previous forecast of 26.2% in Q1, 8.3% in Q2, 5.4% in Q3, and 6.2% in Q4.
  • CPI inflation is projected at 5.1% for FY22 , Inflation is projected at 5.2% in Q1, 5.4% in Q2, 4.7% in Q3, 5.3% in Q4.
  • RBI will Buy Rs.1.2 Lakh crore bonds under the government bond purchase programme G-SAP in the second quarter of FY22 and it will buy Rs.40000 Crore of Bonds on June 17.
  • A special liquidity facility of Rs 15,000 crore for contact intensive sectors. Banks who lend using this window can park an equivalent amount of liquidity at the RBI’s reverse repo window at 40 basis points above the prevailing rate of 3.35%.
  • A special liquidity facility of Rs.16000 Crore will be opened for SIDBI as well for on-lending and refinancing.
  • Regional rural banks have now been permitted to issue certificates of deposit.
  • Banks to be allowed to restructure loans upto Rs 50 crore from Rs 25 crore earlier.
  • India Foreign Exchange Reserves stood at $598 Billion as on 28th May,2021 and may have exceeded $600 Billion.
  • Placement of Margins for Government Securities Transactions on behalf of FPIs
  • Availability of National Automated Clearing House (NACH) on all days of the week

“We will continue to think and act out of the box, planning for the worst and hoping for the best. The measures announced today, in conjunction with other steps taken so far, are expected to reclaim the growth trajectory from which we have slid. Looking ahead, a policy package to consolidate India’s position as vaccine capital of the world with leadership in production of pharma products can change the COVID narrative.” Said Governer Shaktikanta Das.

Outlook:

India’s Monetary Policy Committee kept its key policy rate unchanged amid COVID-19 uncertainty. RBI has taken several steps to promote liquidity and Revival of the economy by announcing it’s another G-SAP programme and easing of loan Facility to MSME, Non-MSME, Individuals and Special loan facility to contact intensive sector. RBI extend the amount of loans restructuring Upto Rs. 50 Crore Will solve liquidity issues to the businesses. The retail Inflation will continue to burden the Consumer as commodity prices continues to rise. The Central and Government taking actionable steps to Support growth and Reforms by Speeding up the vaccination process, Opening up the Economy and maintaining high Foreign Exchange Reserves.

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