RBI has announced Third Bi-Monthly Monetary Policy Statement 2019-20: Point-to-Point Details

RBI has announced Third Bi-Monthly Monetary Policy Statement 2019-20: Point-to-Point Details
RBI has announced Third Bi-Monthly Monetary Policy Statement 2019-20: Point-to-Point Details

RBI has announced Third Bi-Monthly Monetary Policy Statement 2019-20: Point-to-Point Details

RBI Governor Shaktikanta Das has announced the Third Bi-monthly Monetary Policy Statement for the year 2019-20.  

On the basis of an assessment of the current and evolving macroeconomic situation at its meeting, the Monetary Policy Committee (MPC) decided to:-

Reduce the policy repo rate under the liquidity adjustment facility (LAF) by 35 basis points (bps) from 5.75 per cent to 5.40 per cent with immediate effect.

Consequently, the reverse repo rate under the LAF stands revised to 5.15 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 5.65 per cent.


The Cash Reserve Ratio (CRR) of scheduled banks unchanged at 4.0% of (NDTL).


Current RBI Policy Rates Given Below:


Policy Repo Rate
5.40%
Reverse Repo Rate
5.15%
Marginal Standing Facility (MSF) Rate
5.65%
Bank Rate
5.65%
Cash Reserve Ratio (CRR)
4%
Statutory Liquidity Ratio (SLR)
18.75%

RBI Monetary Policy Tools | Monetary Policy Instruments

These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.

On the domestic front, the south-west monsoon gained intensity and spread with the cumulative rainfall 6 per cent below the long-period average (LPA) up to August 6, 2019. In terms of its spatial distribution, 25 of the 36 sub-divisions received normal or excess rainfall as against 28 sub-divisions last year. 

The total area sown under kharif crops was 6.6 per cent lower as on August 2 than a year ago. The live storage in major reservoirs on August 1 was at 33 per cent of the full reservoir level as compared with 45 per cent a year ago. Rainfall during the second half of the season (August-September) has been forecast to be normal by the India Meteorological Department (IMD).

Industrial growth, measured by the index of industrial production (IIP), moderated in May 2019, pulled down by manufacturing and mining even as electricity generation picked up on strong demand. In terms of the use-based classification, the production of capital goods and consumer durables decelerated. However, consumer non-durables accelerated for the third consecutive month in May.

Retail inflation, measured by y-o-y change in the CPI, edged up to 3.2 per cent in June from 3.0 per cent in April-May, driven by food inflation, even as fuel inflation and CPI inflation excluding food and fuel moderated.

Inflation in the food group rose to 2.4 per cent in June from 2.0 per cent in May and 1.4 per cent in April, caused by a sharp pick up in prices of meat and fish, pulses and vegetables. Inflation also edged up in cereals, milk, spices and prepared meals. However, inflation in eggs and non-alcoholic beverages softened. Prices of fruits, and sugar and confectionery remained in deflation in June.

The next meeting of the Monetary Policy Committee (MPC) is scheduled during October 1, 3 and 4, 2019.

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