Highlights of RBI’s monetary policy statement

PTI, May 22, 2020, 1:40 PM IST

Mumbai: 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 estimated to remain in negative territory, with some pick-up in H2

* 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

* 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 487 bn.