Important points from MPC by RBI
Team Ambitiousbaba are here with a Current Affairs Special Series. In this series, candidates will be introduced to current affairs topics daily, which will not only improve their general awareness but also will ensure that the candidates do not lack in any current affairs topic. Today’s Current Affairs topic is “Important points from MPC by RBI”
Reserve Bank of India (RBI) has maintained the benchmark interest rate unchanged at 4 per cent and settled to continue with its accommodative stance despite rising inflation.
Today’s MPC is the 11th time in a row in which the Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das has preserved the status quo. RBI had last reviewed its policy repo rate or the short-term lending rate on May 22, 2020 in an off-policy cycle to brace demand by cutting the interest rate to a historic low.
Important points from recent MPC:
- Two years later as we were emerging out of the pandemic situation, the global economy has seen twisting shifts beginning 24th February with the beginning of the war in Europe, followed by sanctions and escalating geopolitical tensions.
- The central bank would recreate the width of the liquidity adjustment facility to 50 basis points.
- RBI cuts growth projection to 7.2 per cent for FY23 due to War which might block economic recovery.
- Global crude oil prices continue to be volatile at elevated levels.
- RBI to hold orderly financial condition in market and will take actions to control impact of global spillovers.
Most Important take ways for exam point of view:
Marginal standing facility, i.e. MSF rate & bank rate has been unchanged at 4.25%.
RBI has hold the repo rate unchanged at 4%.
MPC has unchanged the reverse repo rate at 3.35%.
Inflation is expected to rise to 5.7%. It was estimated 4.5% earlier for FY23. It is indicating that inflation will be high from here in coming quarters.
RBI revised GDP estimation to 7.2% for Financial Year 2023 which was forecast 7.8% earlier.
RBI expects normal monsoon and crude oil at $100 per barrel for inflation to be at 5.7%.
10-year bond yield has soared to 7% after this announcement which is the highest since 2019.
Announcements made by RBI:
RBI will pursue multi-year withdrawal of Rs 8.5 lakh crore excess of liquidity in system gradually.
RBI Governor announced that a historic Cardless cash withdrawal would be availed in India shortly.
Cardless cash withdrawal:
It has been informed by the RBI Governor, Shaktikanta Das that the system of cardless cash withdrawal will be available across all banks and ATM networks using UPI.
The requirement of net worth for Bharat Bill Payments System Operating Units has been reduced from Rs 100 crore to Rs 25 crore.
Question & Answer:
Q1. What is the projection made by RBI for GDP growth of FY 23 in recent Monetary Policy?
Ans. 7.2% (7.8% earlier)
Q2. How much repo rate and reverse repo rate has been decided in recent MPC of RBI?
Ans. Repo rate- 4%, Reverse Repo Rate- 3.35%
Q3. How much percent inflation has been estimated for FY23?
Ans. 5.7% (earlier 4.5%)
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