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RBI Keeps Repo Rate Unchanged, Maintains Accommodative Stance: Key Highlights

The RBI has projected real GDP growth of 7.8 per cent for financial 2022-23.

RBI Keeps Repo Rate Unchanged, Maintains Accommodative Stance: Key Highlights

The Reserve Bank of India's Monetary Policy Committee kept the repo rate unchanged at 4 per cent and maintained its accommodative stance for as long as possible to revive growth, RBI governor Shaktikanta Das said. Governor Das said that the 6-member (MPC) unanimously voted to keep the rates unchanged at record low and voted in ratio of 5:1 to maintain its accommodative stance. The RBI has projected real GDP growth of 7.8 per cent for financial 2022-23.
 

Here are key highlights from RBI's Monetary Policy:

  • 10 Feb 2022 / 10:41 PM

    44 Unicorns Identified In Country In 2020-21, An Indication Of 'Amrit Kal', Says Nirmala Sitharaman

    • The finance minister says Rs 9.57 lakh crore reduction in GDP was witnessed due to Covid-19 in 2020-21.
    • Urban unemployment has declined, now at pre-pandemic levels, says Sitharaman
  • 10 Feb 2022 / 8:09 PM

    Bank Credit Grows At 8.21%; Deposits At 8.31%, Shows RBI Data

    • Bank credit grew by 8.21 per cent to Rs 115.82 lakh crore and deposits by 8.31 per cent to Rs 160.33 lakh crore in the fortnight ended January 28. 
    • Bank advances stood at Rs 107.04 lakh crore.
    • Deposits advances stood at Rs 148.02 lakh crore. 
  • 10 Feb 2022 / 6:34 PM

    Rupee Falls By 10 Paise To 74.94 As RBI Maintains Repo Rate

    • The rupee slid by 10 paise to close at 74.94 against the US dollar as RBI maintained its 'Accommodative' stance and kept the repo rate unchanged. 
    • In the interbank foreign exchange, Rupee opened at Rs 74.90 against the US dollar. 
    • Rupee was trading at an intra-day high of 74.88 and an intra-day low of 75.05 against the US currency. 
    • Crude oil benchmark Brent crude surged 0.14 per cent to $91.68 per barrel.
    • Foreign institutional investors offloaded shares worth Rs 892.64 crore. 
  • 10 Feb 2022 / 6:11 PM

    Home Loan Interest Rate At Multi-Year Low, As Repo Rate Remains Unchanged

    • RBI repo rate has a direct influence on the home loan interest rate. When it lowers the repo rate, the banks’ cost of borrowing comes down and banks can pass on this benefit to customers. 

    • "In the absence of specific demand-side interventions from the Budget 2022-23, prospective homebuyers can continue to benefit from lower home loan interest rates which are here to stay for now,” says Ramesh Nair, CEO-India and managing director- market development, Asia at Colliers. 
  • 10 Feb 2022 / 5:03 PM

    Sensex Rallies 460 Points After RBI Holds Repo Rate At Record Low

    The Sensex rose as much as 594 points and the Nifty 50 index touched an intraday high of 17,639.45. Rally in today's session was led by buying interest in index heavyweights like Infosys, HDFC Bank, HDFC, Kotak Mahindra Bank, State Bank of India and Tata Steel. The Sensex surged 460 points to close at 58,926 and Nifty 50 index climbed 142 points to close at 17,606.

  • 10 Feb 2022 / 5:01 PM

    RBI To Soon Come Out With Digital Lending Guidelines

    • "RBI has received public comments, and we will frame the guidelines (on digital lending) based on those comments. The work is in progress, and soon it (guidelines) will be launched," Says M Rajeshwar Rao, RBI Deputy Governor. 
    • Regarding new umbrella entity for the retail payments system, Governor Das said that there has been a delay in finalising the name of the applicants.
  • 10 Feb 2022 / 2:02 PM

    RBI Extends Term-Liquidity Facility To Emergency Health Services Till June 2022

    The RBI has proposed to extend the term-liquidity facility of Rs 50,000 crore offered to emergency health services by three months till June 30, 2022.
     

  • 10 Feb 2022 / 12:42 PM

    Working Carefully On CBDCs, Says RBI Governor Shaktikanta Das

    • Taking calibrated approach to bond index inclusion
    • The market was judging inflation to be much higher
    • Working on Central Bank Digital Currencies (CBDCs) we will come test features on design and others going ahead
    • Working carefully on CBDCs evaluating lot of risks; biggest risk is cyber security
    • Cannot spell out timeline for CBDCs
    • World over central banks are working on divergent monetary actions
    • Usual drivers of core inflation not present in India
    • Our inflation projections are benchmarked to international crude oil prices
    • Our actions have not caused any undue volatility in money markets
    • Small savings investments can increase going ahead
    • Technology choices are open for CBDCs
    • Private cryptocurrencies are a major threat to macroeconomic stability
    • Investors should keep in mind they are investing at their own risk
    • Investors investing in cryptocurrencies should know that there is nothing underlying
       
  • 10 Feb 2022 / 12:35 PM

    RBI Could Have Thought To Lower Rates By 25-50 Basis Points, Says Expert

    "RBI has maintained an accommodative stance and kept the repo rates unchanged. However, as inflation is under control, RBI could have thought to lower the rates by 25 to 50 basis points. In the last 2 years, RBI has been maintaining an accommodative stance and slashed rates, which has been instrumental in setting the stage for higher economic growth. RBI should take a cue from the past actions and continue with further measures to support spending and spurred growth," says Siddharth Maurya, Market Expert (Real estate and fund management). 

     

  • 10 Feb 2022 / 12:33 PM

    RBI Objective Must Be Attached To The Growth: Goel Ganga Group

    "The RBI objective must be attached to the growth as the past two years were significantly stressful for the country. The RBI policy review might be raising the reverse repo rate as per the suggestions of the monetary policy committee, however, the important part is to keep the price variation within the check for the consumers. The expectation is around 15 to 20 basis points. But overall it would be the RBI way of handling the inflation limits is to be seen rather than the actual conditions prevailing in the country," says Atul Goel, MD, Goel Ganga Group & President (Elect.), NAREDCO Pune. 

  • 10 Feb 2022 / 12:25 PM

    VRR Scheme Will Provide Additional Sources Of Capital For Domestic Debt Markets And Government Securities: Brickwork Ratings

    Brickwork Ratings says, "In line with BWR’s expectations, RBI continued its dovish stance and remained accommodative by reiterating that despite the economic recovery and aggregate demand gaining traction and improving inflation outlook, continued policy support is warranted to support domestic growth, which is the highest priority. Continuing with its calibrated liquidity management policy to maintain financial stability, RBI emphasized that VRR and VRRR would be the main tools for liquidity adjustment indicating gradual policy normalization on the liquidity front. While stating that headline inflation will peak in Q4 of the current fiscal, RBI maintained its inflation projections at 5.30 per cent for FY22 and a dovish forecast at around 4.50 per cent thereafter. Enhancement of cap and multiple-use under e-RUPI prepaid digital voucher, new credit default swap (CDS) guidelines (to be announced today)  and extension of on tap liquidity for emergency health services and contact intensive sectors till June 30, 2022, are welcome steps. Hiking of limit under Voluntary Retention Route (VRR) scheme from Rs. 1.5 Lakh Crore. to Rs. 2.5 Lakh Crore. will provide additional sources of capital for domestic debt markets and government securities. Increase in NACH mandate from Rs. 1 Crore to Rs. 3 Crore. for TReDS related settlements are expected to improve the receivables financing and overall liquidity position of the MSMEs."

  • 10 Feb 2022 / 11:45 AM

    Rate-Sensitive Sectors May Continue To Outperform: Parth Nyati

    Parth Nyati, Founder, Tradingo says, "Contrary to many central banks, RBI acts dovish and kept interest rates unchanged with an accommodative stance. There were expectations that RBI may hike the reverse repo rate and may change its stance to neutral from accommodative in tandem with hawkish global central banks amid rising inflation but RBI continued with its existing stance. RBI believes that inflation will peak out soon and there is a need for continuous support to the economy. Generally, it is considered positive for the market but it will be important to see how the market will read it because there could be a risk that RBI will remain behind the curve that may cause inflation in the future however the overall structure looks bullish for Indian market after a recent correction. Rate-sensitive sectors like infra, real estate, auto, and financial may continue to outperform."

  • 10 Feb 2022 / 10:50 AM

    Bank Nifty Surges Over 400 Points After RBI Keeps Rates Unchanged

    The gauge of banking shares on the National Stock Exchange - Nifty Bank index surged 431 points to trade above its important psychological level of 39,000

    Here are top gainers from banking space:

    • HDFC Bank up 1.77%
    • State Bank of India up 1.36%
    • Kotak Mahindra Bank up 1.25%
    • Axis Bank up 1.18%
    • IndusInd Bank up 0.9%
       
  • 10 Feb 2022 / 10:39 AM

    RBI Projects CPI Inflation At 5.3% For FY22, 4.5% For 2022-23, Says RBI Governor

    • Some loss of economic momentum due to third pandemic wave; demand for contact intensive sector muted: RBI Governor.
    • Hardening global crude oil prices present an upside risk to inflation, says Shaktikanta Das.
    • To continue with an accommodative stance to revive and sustain growth on a durable basis: RBI Governor Shaktikanta Das.
    • Investment in government and corporate debt by foreign portfolio investors through voluntary retention route scheme extended to Rs 2.5 lakh crore from April 2022, says RBI Governor
    • RBI projects CPI inflation at 5.3% for FY22 and 4.5% in 2022-23, with Q1:2022-23 at 4.9 per cent; Q2 at 5.0 per cent; Q3 at 4.0 per cent; and Q4 at 4.2 per cent.
    • Overall system liquidity remains in large surplus, says RBI Governor. 
    • RBI Governor exhorts banks to augment capital, improve risk management. 
    • Logical to restore revised liquidity management framework to make it more flexible, agile, Says RBI Governor.
       
  • 10 Feb 2022 / 10:16 AM

    Markets Cheer RBI's Move To Keep Repo Rate Unchanged At All-Time Low

    The Sensex rose 134 points and Nifty reclaimed its important 17,500 after the RBI kept repo rate unchanged at 4 per cent and maintained its accommodative stance for as long as possible to revive growth.
    Gauge of banking shares on the NSE - Nifty Bank index jumped 0.5 per cent to 38,802 after RBI's policy announcement. 

  • 10 Feb 2022 / 10:16 AM

    Real GDP Growth Projected At 7.8% For 2022-23

    The RBI has projected real GDP growth at 7.8 per cent for FY 2022-23. The GDP growth for Q1 of FY2022-23 is expected at 17.2 per cent, Q2 is expected at 7 per cent, Q3 is expected at 4.3 per cent and Q4 is expected at 4.5 per cent. 

  • 10 Feb 2022 / 10:13 AM

    Policy Support Is Warranted For Durable And Long Term Recovery: RBI Governor

    The MPC is of the view that continued policy support is warranted for durable and long term recovery, says Shaktikanta Das. 

  • 10 Feb 2022 / 10:11 AM

    RBI Holds Repo Rate At Record Low Of 4%, Maintains Accommodative Stance

    The Monetary Policy Committee has unanimously voted to keep the repo rate unchanged and has maintained the Accommodative Stance. RBI has kept the repo rate unchanged at 4 per cent, the reverse repo rate at 3.35 per cent, marginal standing facility (MSF) and bank rate at 4.25 per cent. 

  • 10 Feb 2022 / 10:06 AM

    RBI Governor Shaktikanta Das Begins RBI Monetary Policy Meeting

    "Pandemic holds the world's economy hostage once again. India poised to grow at the fastest pace among major global economies," says Shaktikanta Das

  • 10 Feb 2022 / 10:04 AM

    Rate Sensitive Shares Fall Ahead Of Policy Decision

    The interest rate sensitive banking, financial services, auto and realty indices were trading lower ahead of the policy decision. 

  • 10 Feb 2022 / 10:04 AM

    Sensex, Nifty Erase Gains Ahead Of RBI Policy Decision

    The Indian equity benchmarks erased gains ahead of the Reserve Bank of India's Monetary Policy Decision. ONGC, Power Grid, Tata Steel and Infosys were amongst the top gainers. Nifty 50 index declined 17 points to 17,446.

  • 10 Feb 2022 / 9:29 AM

    Finance Minister To Meet RBI Board On February 14

    Finance Minister Nirmala Sitharaman will meet the RBI Board on February 14 to discuss the announcements made in Union Budget 2022 and to prepare a roadmap for the economic activities for FY22-23. Notably, it is customary for the finance minister to meet the RBI board after the budget announcements. The government has gone bullish regarding Capital Expenditure (Capex) in the budget this year, increasing it by 35.4  per cent. 

  • 10 Feb 2022 / 9:29 AM

    RBI Likely To Change Monetary Policy From 'Accommodative' To 'Neutral' Say Analysts

    Ahead of the RBI Monetary Policy Decision Meeting, analysts are of the view that the RBI is likely to change the monetary policy from 'Accommodative' to 'Neutral.'  It is also expected that the monetary panel will increase the reverse repo rate by at least 25 basis points. For the past two years, RBI's monetary policy stance has been 'Accommodative' in order to help the banking system to recover from woes of Covid-19 pandemic. 

  • 10 Feb 2022 / 9:29 AM

    Sensex Rises Over 300 Points Ahead Of RBI Policy Decision

    Sensex on Thursday surged 300 points opening at 58,662 ahead of the RBI Monetary Policy Decision Meeting that will take place at 10:00 am. 

  • 10 Feb 2022 / 8:47 AM

    Nifty Seen Opening Above 17,500 Ahead Of RBI's Monetary Policy Decision

    The Indian equity benchmarks are set to open higher as indicated by the Nifty futures traded on Singapore Exchange ahead of Reserve Bank of India's monetary policy decision due later in the day. The Nifty futures on Singapore Exchange also known as SGX Nifty futures rose 28 points or 0.16 per cent to 17,512 indicating a start above 17,500 for the Nifty 50 index.

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