RBI GOVERNOR PRESS CONFERENCE || Dated: 22-May-2020

Please Share:: �� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

��

-->


RBI GOVERNOR PRESS CONFERENCE || Dated: 22-May-2020
⦁ Repo rate cut by 40bps- Repo rate reduced to 4% from 4.4% in off-cycle met. Reverse repo rate stood at 3.35%.
⦁ Accomodative Stance till growth revive- MPC voted in 5:1 ratio for rate cut and will continue with accomodative stance till growth revive.
⦁ Domestic Development- High frequency indicators saw huge collapse, both in rural and urban front.  Merchandise exports plunged 60.3%, imports contracted by 58.6% (worst in many yrs) in Apr'20.  Consumer durable production declined by 33% in Mar'20.
⦁ Inflation- Food inflation surged in Apr'20  to 8.6% with vegetable, oilseeds, and milk being the pressure points.
⦁ Silver Lining- Agriculture and allied activities a hope from the normal south-west monsoons this year.
⦁ Outlook-1) Inflation highly uncertain and headline inflation in H1FY21 will be stay intact but by Q3 and Q4 it may fall below the target of 4%.
2) GDP likely to remain in negative territory in FY21. However, will see gradual revival of activity and demand by the second half of FY21.
⦁ Regulatory and Development- 1) In order to provide greater flexibility of SIDBI, another 90 days extension for the 90-day term loan facilities will be offered.
2) Facility of Rs 15,000 crore line of credit for 90 days for US dollar swap facility will be provided to EXIM Bank. This will have a rollover facility to upto one year.
3) The loan moratorium will be extended till 31-Aug'20. Lending institutions are being permitted to restore the margins for working capital to the origin level by March 31, 2021
4) Maximum permissible period of pre and post shipment of credits increased from 1 year to 15 months.
5) Extension of time period for outward remittances for normal imports from 6 months to 12 months.
6) Group exposure limit of banks will be increased from 25% to 30%.
7) Voluntary retention route for FPIs announced. Extension of 3 months.