RBI’s policy announcement with respect to accommodative stance and policy signal rates is on the expected lines. It is pertinent to note that while the decision of the monetary policy committee for continuance of the accommodative stance was unanimous in the June policy, it is not so in this policy. Since the economic activity was disrupted due to second wave of the pandemic, once again, RBI has given more focus on growth, at the same time quite cautious on the inflation front. Though the overall GDP growth projection for FY 22 is retained at 9.5 per cent, Q2, Q3 and Q4 growth projections have been revised downwards from the previous policy. For Q1, the quarter which has gone by, the projection is hiked to 21.4 per cent from 18.5 per cent estimated in the June policy. On the inflation front, the CPI inflation for the year is projected at 5.7 per cent as against 5.1 per cent in the June statement indicating the buildup of price pressures in the economy. Since the crude oil prices are at the elevated levels, there is pressure on prices. In this policy, RBI has again nudged for reducing the indirect tax component of pump prices by both the centre and state governments to reduce the pressure on prices, said Raj Kiran Rai G, Chairman, IBA
On the Liquidity front Extension of on Tap TLTRO Scheme upto 31st December, 2021 and extension of relaxation under Marginal Standing Facility (MSF) by dipping into SLR upto an addition one percent, etc are measures to ensure sufficient liquidity with the banks to lend to the needy segments of the economy. RBI has also announced the reintroduction of 14-day variable rate reverse repo (VRRR) auctions from 13th August onwards giving the calendar of the programme. It is an additional window for the banks to park excess liquidity at a higher rate than the fixed rate reverse repo option, said Raj Kiran Rai G, Chairman, IBA
