Reserve Bank of India (RBI) Governor Shaktikanta Das made the central bank's Bi-monthly Monetary Policy address at 12 noon today. This was the 24th meeting of the MPC. "Watch out for Bi-monthly Monetary Policy address by RBI Governor Shaktikanta Das at 12:00 hrs on August 06, 2020," RBI said in a tweet.
Although opinions are divided on the rate cut, experts believe loan restructuring is more essential at this juncture to combat the impact of COVID-19.
Around two-thirds of economists in a Reuters poll expect the Reserve Bank of India (RBI) today to cut the repo rate by another 25 basis points (bps) to a record low of 3.50% despite some inflationary pressure.
RBI Governor Shaktikanta Das addresses press conference | HIGHLIGHTS
12:40 pm: RBI proposes for innovation hub and online dispute mechanism for digital payments
12:37 pm: Regulatory response has to be dynamic, proactive and balanced during the coronavirus pandemic
12:36 pm: Loans against gold enhanced to 90% of the value from the current 75%
12:35 pm: Stressed MSME borrowers to be eligible for the restructuring of debt if their accounts were classified standard
12:34 pm: Rs 10,000 cr additional liquidity facility to be provided by NHB, NABARD, says RBI Governor Das
12:33 pm: Window to restructure loans of corporate, individual borrowers
12:29 pm: RBI is constituting an expert committee headed by veteran banker KV Kamath for resolution plans
12:25 pm: Borrowing costs in financial markets at a decade low
12:24 pm: Easing of financial conditions has enhanced transmission
12:23 pm: Inflation to remain elevated in Q2FY21
12:21 pm: India's economic growth to contract in the first half of fiscal beginning April 2020
12:18 pm: MPC expects inflation to remain elevated in Q2, ease in the second half of fiscal
12:17 pm: MPC voted unanimously in favour of status quo, leaving repo rate and reverse repo rate unchanged
12:15 pm: The merchandise exports contracted for a fourth consecutive month though the pace of contraction has moderated, says RBI governor Shaktikanta Das.
12:13 pm: Economic activity had started to recover, but the surge in infection has forced imposition of lockdowns
12:12 pm: Surge in COVID-19 cases has subdued early signs of revival
12:10 pm: Domestic food inflation has remained elevated across economies ever since the Coronavirus outbreak, says RBI governor Shaktikanta Das.
12:08 pm: Global economic activity has remained fragile said RBI governor Shaktikanta Das. But he said that global financial markets have been buoyant.
12:06: The accommodative stance continues
12:04 pm: Reverse repo rate also remains unchanged at 3.3%
12:03 pm: Repo rate remains unchanged at 4%
12:01 pm: RBI Governor Shaktikanta Das addresses the media
The RBI has already reduced the repo rate by a total of 115 basis points since February, on top of the 135 basis points in an easing cycle last year, from 6.50%, responding to slowing growth
Besides, the central bank is expected to issue directions regarding the loan moratorium which is coming to an end on August 31 amid bankers opposing the further extension of this facility on concerns over its misuse. The fast-changing macroeconomic environment and the deteriorating growth outlook necessitated off-cycle meetings of the MPC -- first in March and then again in May 2020.
The MPC has cumulatively cut the repo rate by 115 basis points over these two meetings, resulting in total policy rate reduction of 250 basis points since February 2019, with an aim to boost economic growth.
The government has tasked RBI to keep inflation at 4 per cent (+, - 2 per cent). The central bank mainly factors in the Consumer Price Index (CPI) while formulating the monetary policy. The monetary policy was in an accommodative mode even before the outbreak of COVID-19, with a cumulative repo rate cut of 135 basis points between February 2019 and the onset of the pandemic.
Around two-thirds of economists in a Reuters poll expect the RBI today to cut the repo rate by another 25 basis points (bps) to a record low of 3.50 per cent despite some inflationary pressure.