Mumbai: reserve Bank of India (reserve Bank of India) Governor Shaktikanta Das demonstrated that the central bank is prepared to do whatever it takes to nurture a ‘nascent and hesitant’ recovery by holding policy rates, even when inflation is expected to be uncertainly approaching tolerance levels. Is.
The implication for borrowers is that there is not much scope for reduction in interest rates except for some pass-through of earlier cuts by lenders. RBI has cut the repo rate by 250 basis points (1% = 100 bps) since February 2019 and banks have responded with a cumulative 217 bps fall in their weighted average lending rate.
Pointing out that indicators of consumption, investment and external demand are picking up, Das was optimistic about the recovery and retained his forecast for the same. FY22 at 9.5%. This will include 21.4% in Q1; 7.3% in Q2; 6.3% in Q3; and 6.1% in the fourth quarter of 2021-22. Q1: The real GDP growth for 2022-23 is projected at 17.2%.
Inflation forecast raised to 5.7% from 5.1% earlier: 5.9% in Q2; 5.3% in Q3; and 5.8% in the fourth quarter of 2021-22.
Das explained the rationale for looking at inflationary pressures, saying that these were fleeting and that policy normalization would now be pre-emptive. “With adequate pandemic protocols and ramp-up in vaccination rates, we should be able to tackle the third wave,” Das said.
Declaration of the Monetary Policy Committee (MPCAfter a bi-monthly review of the RBI’s decision, Das said the members were unanimous on keeping the repo rate at 4%. However, one member voted against the motion to continue with the ‘accommodative’ stance.
In its development measures, the RBI extended by three months till December 2021 a plan to provide cheap refinance to banks that lend to corporates. NS Targeted Long Term Repo Operations was declared in the wake of the pandemic and was already extended once for six months.
Considering the impact of the second wave, RBI has relaxed norms for companies that were allowed to restructure their loans. These companies were required to meet sector-specific limits in five financial parameters – total debt to EBITDA ratio, current ratio, debt service coverage ratio and average debt service coverage ratio – by March 31, 2022. Now they have till October 2022 to complete. parameter.
The implication for borrowers is that there is not much scope for reduction in interest rates except for some pass-through of earlier cuts by lenders. RBI has cut the repo rate by 250 basis points (1% = 100 bps) since February 2019 and banks have responded with a cumulative 217 bps fall in their weighted average lending rate.
Pointing out that indicators of consumption, investment and external demand are picking up, Das was optimistic about the recovery and retained his forecast for the same. FY22 at 9.5%. This will include 21.4% in Q1; 7.3% in Q2; 6.3% in Q3; and 6.1% in the fourth quarter of 2021-22. Q1: The real GDP growth for 2022-23 is projected at 17.2%.
Inflation forecast raised to 5.7% from 5.1% earlier: 5.9% in Q2; 5.3% in Q3; and 5.8% in the fourth quarter of 2021-22.
Das explained the rationale for looking at inflationary pressures, saying that these were fleeting and that policy normalization would now be pre-emptive. “With adequate pandemic protocols and ramp-up in vaccination rates, we should be able to tackle the third wave,” Das said.
Declaration of the Monetary Policy Committee (MPCAfter a bi-monthly review of the RBI’s decision, Das said the members were unanimous on keeping the repo rate at 4%. However, one member voted against the motion to continue with the ‘accommodative’ stance.
In its development measures, the RBI extended by three months till December 2021 a plan to provide cheap refinance to banks that lend to corporates. NS Targeted Long Term Repo Operations was declared in the wake of the pandemic and was already extended once for six months.
Considering the impact of the second wave, RBI has relaxed norms for companies that were allowed to restructure their loans. These companies were required to meet sector-specific limits in five financial parameters – total debt to EBITDA ratio, current ratio, debt service coverage ratio and average debt service coverage ratio – by March 31, 2022. Now they have till October 2022 to complete. parameter.
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