10 key takeaways from RBI policy review

8 Jun 2022 , 02:38 PM

 

On June 8, the six-member Monetary Policy Committee, led by RBI Governor Shaktikanta Das, unanimously increased the repo rate, the key policy rate at which the central bank lends short-term cash to banks, by 50 basis points to 4.90%.The latest policy rate hike follows the Reserve Bank’s announcement in May of a 40 basis point increase in the repo rate in an off-cycle policy action.

1. The rates for the Standing Deposit Facility and the Marginal Standing Facility have been increased by 50 basis points. The rate on the Standing Deposit Facility has risen to 4.65 percent, while the rate on the Marginal Standing Facility has risen to 5.15 percent.
2. The MPC unanimously agreed to keep focusing on the removal of accommodation in order to keep inflation under target in the future.
3. The projection for GDP growth in FY23 has been kept at 7.2 percent. April-June GDP growth is expected to be 16.2%. For the months of July through September, GDP growth is expected to reach 6.2 percent. For the months of October through December, GDP growth is expected to reach 4.1 percent. From January to March 2023, GDP growth is expected to be 4.0 percent.
4. Inflationary expectation for FY23 has been increased to 6.7 percent from 5.7 percent. The Reserve Bank of India’s inflation projection assumes a regular monsoon and a crude basket price of $105 per barrel.
5. The RBI would provide adequate liquidity in the banking system while normalizing pandemic-related actions.
6. The RBI is keeping a tight eye on the government securities market. As and when necessary, it will take the necessary steps.
7. India’s foreign exchange reserves were $601.1 billion as of June 3.
8. Individual house loan limits set by urban and rural cooperative banks are being raised upwards by more than 100% to reflect the increase in housing values over the last decade.
9. The cap on recurring e-payments has been increased from Rs 5,000 to Rs 15,000 to make transactions like subscriptions easier.
10. Beginning with RuPay credit cards, credit cards can now be linked to UPI.