Following are the highlights of RBI Governor Shaktikanta Das’ 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
* RBI advances MPC meeting to take key decisions
* RBI Governor said it is in growth outlook that the MPC judged the risks to be gravest
* GDP growth in FY21 is estimated to remain in negative territory, with some pick-up in H2
* Top 6 industrialized states accounting for about 60 pc of industrial output largely in red/orange zones
* High-frequency indicators point to a 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 the economy are experiencing acute stress
* Economic activity other than agriculture likely to remain depressed in Q1 due to lockdown
* Inflation outlook highly uncertain
* Moratorium on term loan installments 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 the 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 the functioning of markets and market participants
* Forex reserves increase by USD 9.2 bn in 2020-21 (up to May 15) to USD 487 bn.
