In the second bi-monthly monetary policy statement announced on Thursday (dated 06.08.2020), MPC decided to keep policy REPO rate under the liquidity adjustment facility (LAF) unchanged at 4.25 per cent. The MPC also decided to continue with the accommodative stance as long as it is necessary to revive growth, while ensuring that inflation remains within the target.
Consequently, all key policy rates with effect from May 22, 2020 remaining same from August 6, 2020 till the next meeting of MPC which is as under:
CRR (Cash Reserve Ratio) | 3.00% |
SLR (Statutory Liquidity Ratio) | 18.00 % |
Repo Rate | 4.00% |
Reverse Repo Rate | 3.35% |
MSF Rate (Marginal Standing Facility Rate) | 4.25% |
Bank Rate | 4.25% |
All other terms and conditions of the extant LAF Scheme will remain unchanged.
The MPC statement said that the Headline CPI inflation, which was at 5.8 per cent in March 2020, was placed at 6.1 per cent in the provisional estimates for June 2020. The committee is optimistic of lower inflation over the longer horizon. This is in view of July 2020 round of the Reserve Bank’s survey, which indicated that Households’ one year ahead inflation expectations were lower than their three months forward expectations in the July 2020 is optimistic.
Special announcements:
Noting that in an environment of unprecedented stress, supporting recovery of the economy assumes primacy in the conduct of monetary policy, the Governor outlined the following main measures. He said the Statement on Developmental and Regulatory Measures addresses them in greater detail.
The Governor said that the Statement on Developmental and Regulatory Measures addresses them in greater detail.
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