18th July 2024

Confidant Classes

for LAW | CLAT | JUDICIARY

REPO Rate unchanged

The Monetary Policy Committee (MPC) of the Reserve Bank of India unanimously decided to keep the repo rate unchanged at 4%. While Governor Shaktikanta Das has said that the RBI’s accommodative stance continues, the maintenance of rates runs counter to general market expectations that the central bank will cut official rates to allow banks to lend more funds to customers.

  • Along with its decision to maintain rates, the central bank also announced a major restructuring program to lend to stressed MSMEs (loan rescheduling), which banks and NBFCs have strongly championed in the face of growing concerns on the front line.
  • A Bad debts panel will be established to work out the details of this scheme.
  • As the Indian economy is still grappling with new localized lockdowns to control the spread of Covid-19 and lingering concerns about demand, especially in sectors such as residential real estate and consumer durables, the RBI was increasingly expected to cut back further its policy by an additional 25 basis points (one basis point equals one hundredth of a percentage point) to stimulate growth.

There could be two main reasons why the MPC did not cut rates

First, retail inflation, measured by the consumer price index, rose in June from 5.84% to 6.09% in March, exceeding the central bank’s medium-term goal. 2 to 6%. This appears to have been a major red flag, prompting the MPC’s unanimous decision to refrain from cutting official rates.

  • Das specifically expressed concern about national food inflation, which remains high, although he mentioned that the outlook for the agricultural sector has improved with the good monsoon and increased acreage for planting kharif.
  • Second, in May, the MPC reduced the repo rate by 40 basis points to 4%, while maintaining its accommodative policy.
  • In fact, in the past seven months, the MPC has already lowered the repo rate by 115 basis points amid the COVID-19 outbreak and the resulting economic consequences, even as the transmission by banks to clients has not yet is fully operational.
  • In the big picture, Das said global economic activity remains fragile, although financial markets have been vibrant.
  • Real GDP growth will remain negative, he said, even as “any positive news about the COVID-19 containment efforts would change that scenario.”
Registration for CLAT 2025 begins today; last date October 15

Registration for CLAT 2025 begins today; last date October 15

CLAT 2025: Candidates who wish to appear for the law entrance exam can apply on the official website: consortiumofnlus.ac.in CLAT-2025…
Read More
CLAT 2025 registration will begin on July 15

CLAT 2025 registration will begin on July 15

CLAT-2025 CLAT 2025: The CLAT 2025 registration will begin on July 15. The Common Law Admission Test (CLAT 2025) notification…
Read More
Delhi University 5 Year Law Programs Registration Begins

Delhi University 5 Year Law Programs Registration Begins

Delhi University has started the registration process for 5 year law programs. Candidates applying for the 5-year law programs can…
Read More
Bar Council of India proposes to hold CLAT and declares NLU Consortium a non-statutory body

Bar Council of India proposes to hold CLAT and declares NLU Consortium a non-statutory body

The Bar Council of India, in a supplementary affidavit filed before the Delhi High Court, proposed to conduct the Common…
Read More
DU UG 2023 Admissions Process Expected to Begin End of May

DU UG 2023 Admissions Process Expected to Begin End of May

Admissions for undergraduate and graduate programs will be by CSAS (UG) 2023 and CSAS (PG) 2023. Delhi University plans to…
Read More
CUET UG 2023 Participating Universities | Central University of Karnataka

CUET UG 2023 Participating Universities | Central University of Karnataka

The Central Karnataka University will start admission for its undergraduate programs from May 21 this year. Admission to these UG…
Read More
AIBE XVII 2023 results published

AIBE XVII 2023 results published

AIBE XVII Result: Candidates who have taken the exam can now check their result on the AIBE website: allindiabarexamination.com. AIVE…
Read More
CUET PG 2023 | Six universities join the CUET PG

CUET PG 2023 | Six universities join the CUET PG

CUET PG 2023: Interested and eligible candidates can apply until May 5 on the official website: cuet.nta.nic.in. The CUET PG…
Read More
AIBE XVII (17) 2023 result

AIBE XVII (17) 2023 result

Once released, candidates who have taken the AIBE XVII(17) 2023 exam will be able to check their score on the…
Read More
CUET UG 2023 Participating Universities | Central University of Haryana

CUET UG 2023 Participating Universities | Central University of Haryana

The university currently has eight schools and 34 departments that offers science and humanities programs. CUET-2023-Preparation CUET UG 2023: The…
Read More

About Post Author