23rd May 2022

Confidant Classes

Competitors' very first choice

Home | Edu NEWS | REPO Rate unchanged

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.”
MHT CET 2022 | Application Form, Exam Dates Revised

MHT CET 2022 | Application Form, Exam Dates Revised

Maharashtra Higher and Technical Education Minister Uday Samant announced on April 21 (Thursday) that Maharashtra CET 2022 will now be…
Read More
How to prepare for CLAT 2022

How to prepare for CLAT 2022

The Common Law Admission Test (CLAT) is an all-India entrance examination, conducted on rotation by 22 National Law Universities (NLU)…
Read More
QS World University Rankings by Subject 2022

QS World University Rankings by Subject 2022

Take a look at the top 10 colleges in the QS World University Rankings by Subject 2022. QS Quacquarelli Symonds,…
Read More
Study Abroad | UK

Study Abroad | UK

The UNITED KINGDOM (UK) has a long tradition of academic excellence. This year’s QS World University Rankings has the best…
Read More
How to prepare CUET 2022

How to prepare CUET 2022

How to prepare CUET 2022 The government has recommended that the Common Universities Entrance Test (CUET) be carried out. There…
Read More
UGC allows students to follow two full-time university programs simultaneously

UGC allows students to follow two full-time university programs simultaneously

UGC has announced guidelines for students to earn two degrees simultaneously in physical, online, or combined online mode with NEP…
Read More
DU Admission Policy

DU Admission Policy

DU Admission Policy Announced Delhi University (DU) Vice-Chancellor Yogesh Singh released the university’s admission policy under the Common University Entrance…
Read More
More than 12 lakh of candidates registered for UGC-NET 2021: NTA

More than 12 lakh of candidates registered for UGC-NET 2021: NTA

The exam on November 20 was successfully conducted in 177 cities and 338 centers in two shifts of 3 hours…
Read More
Each additional year of education increases a person’s average income by approximately 6.7% in India | study

Each additional year of education increases a person’s average income by approximately 6.7% in India | study

The study also found that each rupee invested in completing school studies is expected to generate an economic benefit of…
Read More
Public school enrollment increased by 5 percentage points in pandemic year | ASER survey 2021

Public school enrollment increased by 5 percentage points in pandemic year | ASER survey 2021

The report points out that the increase in public school enrollment is almost uniform across all age groups and levels….
Read More
error

Enjoy this? Please spread the word :)