RBI Monetary Policy, Repo Rate: The Reserve Bank has not made any change in the repo rate. The repo rate is stable at the level of 5.15 per cent. The reverse repo rate is at 4.9 per cent.
New Delhi: RBI has not made any change in the repo rate. After which the repo rate is stable at 5.15 per cent, while the reverse repo rate is stable at 4.90 per cent. The Marginal Standing Facility (MSF) and Bank Rate are at 5.40 per cent.
The Reserve Bank of India was expected to cut the repo rate for the sixth consecutive time to support the economy. This is the last monetary policy of this year. The Monetary Policy Committee has decided not to change the repo rate.
All members of the monetary policy have voted in favor of no change in the repo rate. The RBI in its report has released estimates of CPI 3.5 to 3.7 per cent for the second half of 2019-20.
With this, the bank has estimated CPI at 3.6 per cent in the first quarter of FY 2020-21. The next monetary policy meeting of RBI will be held from 4 to 6 February 2020.
Reserve Bank Governor Shaktikanta Das said, “Foreign exchange reserves jumped on December 3 to reach a new high of $ 451.7 billion.” The rupee fell eight paise to 71.61 against the dollar after the Reserve Bank’s monetary policy made no change in the repo rate.
RBI has also reduced GDP estimates. The apex bank reduced the growth rate from 6.1 per cent to 5 per cent in October. In the second half, the GDP growth rate is estimated to be between 4.9 per cent and 5.5 per cent, GDP growth from 5.9 to 6.3 per cent in FY 2020-21.
Manju Yagnik, Vice President, Nahar Group and Vice President, Naredco (Maharashtra) said, ‘The MPC has announced its decision to keep the repo rate at 5.15 per cent despite the expectation of a 25 basis points cut.
Overall, this financial year has seen an adjustment of 100 basis points so far, and is a sign of the Center’s accountability to address overall concerns surrounding growth.’
Rohit Poddar, Managing Director, Poddar Housing and Development Limited and Joint Secretary, Naredco Maharashtra said, “RBI has taken an aggressive role along with temporary stoppage in rate cut.
The regulator is considering taking the next cut at a time when it would have optimum effect. The liquidity surplus since June and the impact of the 135 bps cut so far will finally be reflected in its expected reality, which will help the real estate sector in the long term.’
Shok Mohanani, president, Ekta World told, ‘From February 2019, the easing of monetary policy and measures initiated by the government in the last few months are expected to improve sentiment and domestic demand.
Considering the 135 bps change delivered throughout the year and with the revival of the industry, we are still expecting positive transmission for the industry.’
The country’s GDP growth rate fell to 4.5 percent in the second quarter of the financial year. This rate has been the lowest in the last 26 quarters. In August this year, RBI cut the repo rate by 0.25 percent. The Reserve Bank had cut the repo rate by 0.25 per cent in February this year.
Along with this, a total of 1.35 percent reduction has been done in five reviews till October, including a 0.25 percent reduction in February. In five reviews from February to October 2019, the repo rate fell from 6.50 percent to 5.15 percent. But during this period, banks have passed only 0.29 percent reduction to customers.
Recently, the Reserve Bank has made several efforts to take advantage of the lending rates. For this, it has also stated the need to link the interest rate of banks with external benchmark rate.
The Reserve Bank’s fifth monetary policy review of the current financial year is to be announced on Thursday. This three-day meeting began on Tuesday.