RBI’s monetary policy statement: Here are the key highlights

By: |
December 4, 2020 12:34 PM

Fiscal stimulus moving beyond being supportive of consumption and liquidity to supporting growth-generating investment.

The MPC projected consumer price index (CPI) inflation at 6.8% for Q3FY21, 5.8% for Q4FY21, and 4.6-5.2% in H1FY22, with risks broadly balanced.The MPC projected consumer price index (CPI) inflation at 6.8% for Q3FY21, 5.8% for Q4FY21, and 4.6-5.2% in H1FY22, with risks broadly balanced.

Following are the highlights of RBI Governor Shaktikanta Das’ statement and resolution of the Monetary Policy Committee (MPC):

* Benchmark rate kept unchanged for third time in a row at 4 pc
* Indian economy expected to contract 7.5 pc this fiscal, lower than 9.5 pc contraction projected in Oct
* Economy to clock growth of 0.1 pc in Q3; Q4 to see 0.7 pc growth
* Retail inflation projected at 6.8 pc in Q3, 5.8 pc in Q4
* Inflation to remain elevated, barring transient relief in the winter months

* Fiscal stimulus moving beyond being supportive of consumption and liquidity to supporting growth-generating investment.
* Private investment still slack and capacity utilisation has not fully recovered

* RBI to use various instruments at appropriate time to ensure ample liquidity is available in system
* RBI ready to take further measures to ease liquidity; will continue to respond to global uncertainty
* RBI to maintain accommodative monetary policy stance to support growth, keep inflation at targeted level
* To raise limit for contactless card transaction from Rs 2,000 to Rs 5,000 per transaction from January
* RTGS system to be made 24X7 in next few days
* Commercial, cooperative banks to retain profit made in 2019-20; not to make any dividend payment
* RBI committed to preserving depositors’ interest in the financial system.

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