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After the first RBI bi-monthly monetary policy statement 2016-17 released in April 2016, the RBI second bi-monthly monetary policy statement 2016-17 was awaited by everyone, who shows interest in economic policies.
Now the wait is over as RBI Governor Mr. Raghuram Rajan has presented the RBI second bi-monthly monetary policy statement 2016-17 on 7th June 2016. The statement shows the RBI rate cut under RBI monetary policy.
*RBI Monetary policy is the macroeconomic policy laid down by the central bank. It involves management of money supply and interest rate and is the demand side economic policy used by the government of a country to achieve macroeconomic objectives like inflation, consumption, growth and liquidity.
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With the presentation of the Bi-monthly statement by R. Rajan, we may find some changes in the RBI Exchange Rates and RBI Rates like Bank rate, Repo rate, CRR rate, SLR rate etc.
These changes should be known by all of you, if you are preparing for upcoming bank exams like IBPS PO, IBPS Clerk etc. To update you about the changes or adjustments done in the RBI Policy rates, here we are giving you the highlights of the RBI second bi-monthly monetary policy statement 2016-17. To know the current status of various policy rates, Reserve Ratios and Deposit Rates, read below carefully: –
Current Policy Rates
|Policy Repo Rate||6.50%|
|Reverse Repo Rate||6.00%|
|Marginal Standing Facility Rate (MSF)||7.00%|
Current Reserve Ratios
|Cash Reserve Ratio (CRR)||4.00%|
|Statutory Liquidity Ratio (SLR)||21.25%|
Current Deposit/Lending Rates
|Base Rate||9.30% – 9.70%|
|Savings Deposit Rate||4.00%|
|Term Deposit Rate > 1 Year||7.00% – 7.50%|
[Recommended] Know all the Important Banking Terms including the above mentioned policy rates, Reserve Ratio and Deposit Rates.
Monetary and Liquidity Measures
By assessing the Second Bi-monthly Monetary Policy Statement, 2016-17, the following posts have been decided by Reserve Bank of India (RBI): –
RBI decided to keep the Repo Rate unchanged under the liquidity adjustment facility (LAF) at 5 per cent.
It was decided to keep the Cash Reserve Ratio (CRR) of scheduled banks unchanged at 4.0 percent of Net Demand and Time Liabilities (NDTL).
RBI will also continue to provide liquidity as required but progressively lower the average ex-ante liquidity deficit in the system from one per cent of NDTL to a position closer to neutrality.
Therefore, by taking all these major decisions regarding the RBI Policy Rates, the Reverse Repo Rate under the LAF will remain unchanged at 6.0 percent, and the marginal standing facility (MSF) rate and the Bank Rate at 7.0 per cent.
Important points under RBI second bi-monthly monetary statement 2016-17
Repo rate is unchanged and thus constant at 6.50%.
Reverse repo rate is unchanged and remained at 6.00%.
Cash reserve ratio (CRR) also remained unchanged at 4.00%.
The monetary policy will remain accommodative.
For the current fiscal the Pegs Growth has been forecasted at 7.6%.
For January 2017, the Inflation targets are kept at 5%, thus remained unchanged.
The effects of firming crude oil prices will be watched.
7th pay commission’s recommendations will be implemented.
To make the credit flow easy, timely capital infusion in Public Sector Banks will be made possible.
The continuing weakness in private investment and public investment gaining strength will be taken into consideration.
The implementation of the Marginal Cost Lending Rate framework by banks will be examined.
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Important Dates to be noted
|RBI’s Bi-monthly Report||Date|
|RBI 3rd Bi-monthly Report||9th August 2016|
|RBI 4th Bi-monthly Report||4th October 2016|
|RBI 5th Bi-monthly Report||6th December 2016|
|RBI 6th Bi-monthly Report||7th February 2017|
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