Following are the highlights of RBI Governor Shaktikanta Das's statement and resolution of the Monetary Policy Committee (MPC):
- RBI cuts repo rate by 40 bps to 4 pc
- Reverse repo rate reduced to 3.35 pc
- Second sharp reduction in key policy rates in 2 months
- GDP growth in FY21 estimated to remain in negative territory, with some pick-up in H2
- Moratorium on term loan instalments extended by another 3 months till Aug 31, 2020
- Lending institutions permitted to allow deferment of interest on working capital facilities till Aug 31
- RBI decides to extend time for completion of remittances against imports from 6 months to 12 months for imports made before July 31
- RBI extends a line of credit of Rs 15,000 crore to the EXIM Bank
- Maximum permissible period of export credit increased to 15 months from 12 months
- RBI announces measures to improve functioning of markets and market participants
- Forex reserves increase by USD 9.2 bn in 2020-21 (up to May 15) to USD 487bn.
- Top 6 industrialised states accounting for about 60 pc of industrial output largely in red/orange zones
- High frequency indicators point to collapse in demand beginning in March
- MPC opined macroeconomic impact of COVID-19 is turning out to be more severe than initially anticipated
- Various sectors of economy are experiencing acute stress
- Economic activity other than agriculture likely to remain depressed in Q1 due to lockdown
- Inflation outlook highly uncertain
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