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Abhilasha G @Eduncle posted an Article
December 18, 2019 • 6:33 pm

RBI’s 5th Bi-Monthly Monetary Policy Review, Repo Rates Unchanged [Highlights]

RBI 5th Bi-Monthly Policy Review

 

While preparing for the banking exam, it is important to be aware of the changes made in the economy.

India’s Central Bank RBI is the major organization entitled to take every important decision related to economic and interest rate policies. It has announced the fifth Bi-Monthly Monetary Policy Review on 5th December 2019.

In this article, we have discussed the major highlights of RBI’s 5th meeting regarding the important bank rates and price stability to achieve high economic growth.

 

Finalized Rates after RBI’s 5th Meeting Review

Highlights of Monetary Policy Statement

 

 

Analyze Your Preparation Level by Solving Previous Year IBPS Exam Papers and Model Papers. Click Here to Download Free PDFs!

 

 

 

Finalized Banking Rates after RBI’s 5th Monetary Policy Review

 

Every year, Reserve Bank of India announces a total of six bi-monthly policies in February, April, June, August, October and December to regulate the flow of money, variation in interest rates and credit controls.

 

RBI Governor Shaktikanta Das has announced the stance of the meeting as follows:

 

Key Rates after Fifth Bi-Monthly Policy 2019-20 Review

S. No.

Instruments

Current Rates

1

Repo Rate

5.15%

2

Reverse Repo Rate

4.90%

3

CRR

4.0%

4

Bank Rate

5.40%

5

MSF (Marginal Standing Facility)

5.40%

6

SLR (Statutory Liquidity Ratio)

18.50%

 

The Monetary Policy Committee (MPC) decided to keep the repo rate unchanged on the basis of assessment of the current situation to maintain its accommodative stance.

 

The decision was made with an objective of achieving Consumer Price Index (CPI) inflation at 4% within a band of +/- 2% while supporting the growth.

 

Let’s have a look at the most important points of the policy review by the Reserve Bank Committee. It will help you understand the decisions closely.

 

 

 

Important Highlights of 5th Bi-Monthly Monetary Policy Review

 

We have concluded the important stance taken by members of MPC as following:

Reserve Bank of India continues with an accommodative monetary stance to revive growth.

All members of the MPC have voted in favour to keep the key rates unchanged.

The GDP growth forecast for the current fiscal year is reduced to 5% from 6.1%.

RBI expects retail inflation projection for the second half of the year 2019-20 to 5.1 - 4.7% from the previous 3.5-3.7%.

Food inflation will remain very high in the coming months while fuel group price remained in deflation.

The central bank had earlier reduced the repo rate by 135 basis points between February to October 2019.

Foreign exchange reserves stood at $451.7 bn on 3rd December & up to $38.8 bn over March-end 2019.

 

Suggested Reads:

RBI 4th Bi-Monthly Policy Review 2019-20 | Repo Rate Cut by 25 bps 

Important Banking Terms – SBI, IBPS PO/ Clerk/ SO/ RRB Exam 

RBI Governors: A complete list of the past and present governors [UPDATED]

 

 

Analyze Your Preparation Level by Solving Previous Year IBPS Exam Papers and Model Papers. Click Here to Download Free PDFs!

 

 

Important Upcoming Events

  • The minutes of the MPC’s meeting will be published on 19 December 2019.
  • The next meeting of the MPC is scheduled during 4-6 February 2020.

 

This was all about the major decisions taken in the RBI’s 5th bi-monthly monetary policy. Hope it will help you in IBPS, SBI and other banking exam preparation.

 

Stay tuned with Eduncle for upcoming updates related to other major happenings in India. You can share your doubts or query with us in the comment section below.

 

Thank You!!