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'Rate cut transmission to help ease financial conditions'
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SME Times News Bureau | 23 Oct, 2020
The ongoing transmission of
past monetary policy actions would help ease financial conditions
further, RBI Governor Shaktikanta Das had said during the previous
monetary policy committee meet.
According to the minutes of the
MPC meet released on Friday, Das said: "The ongoing transmission of past
monetary policy actions would help ease financial conditions further."
The
statement assumes significance as past rate cut transmission will
provide lower interest rates which in effect is expected to trigger
consumption and economic revival.
Besides, the Governor said that there exists space for future rate cuts if the inflation evolves in line with the expectations.
"This space needs to be used judiciously to support recovery in growth," he said.
Das
said that monetary policy at this stage has to provide adequate support
to ensure a robust revival of the economy from the devastating effects
of Covid-19, while at the same time ensuring that any persistence of
elevated inflation does not lead to unanchoring of inflation
expectations.
"With the supply side disruptions that are seen to
drive the current inflationary pressures likely to be transient and wane
out in months ahead as economy normalises, there is merit in looking
through the current high levels of inflation and persevere with the
accommodative stance for monetary policy as long as necessary to revive
growth on a durable basis," Das said.
"Moreover, taking into
account the projected moderation in inflation and the large output loss,
I vote to keep the policy rate unchanged at present and continue with
the accommodative stance, during the current financial year and into the
next financial year, at the least. This would help to reduce
uncertainty and market volatility. This would also enhance confidence in
the monetary policy resolve to support the growth recovery process
while ensuring that inflation remains within the target," he added.
The penultimate meet of the MPC in 2020 was conducted from October 7 to 9.
Accordingly,
the MPC decided to maintain the repo -- or short-term lending -- rate
for commercial banks at 4 per cent on the back of persistently high
inflation, fanned in part due to supply side disruptions along with
seasonal factors.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
|
64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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