RBI Monetary Policy- Repo Rate Unchanged, FY 2022 GDP growth outlook retained at 10.5%

RBI Monetary Policy April 2021- The RBI Monetary policy committee on 7th April, Wednesday kept the repo rate (at which RBI lends short-term funds to the banks) unchanged at 4%. The reverse repo rate stands at 3.35 percent.

The RBI Governor Shaktikanta Das said that the central bank will remain accommodative as long as necessary to sustain growth on a durable basis.

RBI Monetary Policy April 2021

Here are the key updates of “RBI Monetary Policy April 2021”

  • RTGS and NEFT facilities will be extended to digital payments intermediaries, beyond banks.
  • Enhancing ways & means advance (WMA) limit to ₹ 47,010 crores, up 46% from the current limit of ₹ 32,225 crores: RBI Governor.
  • Governor Das says that a body will be set up to review the functioning of Asset Reconstruction Companies (ARCs) and recommend measures.
  • ₹ 50,000 crores of lending support to be provided to Nabard, NHB, and Sidbi as fresh lending in 2021.

Also Read- List of Bank Holidays in April 2021: 9 Days Bank Holidays in April Month.

  • The TLTRO scheme is being extended by 6 months, up to September 30, 2021.
  • To purchase ₹ 1 lakh crore of G-secs under G-SAP in Q1: Das.
  • RBI Governor announces Secondary Market G-Sec Acquisition Programme 1.0; to purchase ₹ 25,000 crores of G-Secs on April 15 under G-SAP.
  • RBI will support the market with adequate liquidity via its various tool kits: Governor.
  • RBI is indirectly expanding liquidity. Have conducted liquidity for orderly market conditions: Das
  • CPI for FY22 is seen at 5.1%
  • Q1FY22 GDP growth outlook is 22.6 percent, and for Q2FY22 at 8.3 percent, said the governor.
  • GDP growth outlook for FY22 is maintained at 10.5 percent. The MPC had projected this estimate during the previous policy announcement.
  • The global economy is showing some recovery but the path remains uncertain, says Das.
  • Rural demand remains resilient, urban demand gains traction and should pick up: Governor Das.
  • RBI Governor Shaktikanta Das says vaccine distribution & its efficacy is key to global economic recovery.
  • MPC voted unanimously to leave the repo rate unchanged.

Also Read- 6 companies including Aadhar Housing Finance ready to launch their IPO in the month of April 2021

  • Marginal standing facility and bank rate kept unchanged at 4.25%.
  • RBI keeps the repo rate unchanged at 4%, maintains an accommodative stance; the Reverse repo rate stands at 3.35%.
  • The maximum end-of-day balance for payment banks doubled to ₹ 2 lakh.

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Compiled by- CA Chirag Agarwal (Practicing Chartered Accountants)

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