Monetary Policy announcements exhibit continuity and stability - Expert Ajay Bagga tells Anil Singhvi
The Monetary Policy announcements by the Reserve Bank of India (RBI) Governor Shaktikanta Das has exhibited continuity and stability with an assurance to maintain the liquidity, Market Expert Ajay Bagga said. Calling it positive for the markets, he said that the banking regulator has maintained its accommodative stance
The Monetary Policy announcements by the Reserve Bank of India (RBI) Governor Shaktikanta Das has exhibited continuity and stability with an assurance to maintain the liquidity, Market Expert Ajay Bagga said. Calling it positive for the markets, he said that the banking regulator has maintained its accommodative stance.
As expected, the RBI in its bi-monthly Monetary Policy 2021 announcements on Wednesday left interest rates unchanged while maintaining an accommodative stance as the economy faces a renewed threat to growth due to the resurgence of coronavirus cases. The central bank kept the benchmark repurchase rate unchanged at 4 per cent and maintained an accommodative policy stance to support growth.
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The Central Bank has decided to continue the policies that expired on 31 March 2021 including TLTRO (Targeted Long Term Repo Operations). TLTRO has been extended by another six months till 30 September.
The focus on digital payments will remove friction from the economy. It has also maintained the growth at 10.5 per cent on the back of current restrictions in place because of the resurgence of new cases, he said.
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Like most Central Banks, the RBI has said that inflation will be transient and could fall by the end of the year.
Another expert V.K. Sharma of HDFC Securities said that there is a coordination between the RBI and the Government. This teamwork infuses a lot of confidence among the investors, industries and consumers that the growth will not be allowed to take a hit, he said.
He was all praise for the RBI Governor and the members of the Monetary Policy Committee.
Among other measures, the RBI announced Rs 50,000 cr additional liquidity facility to NABARD, NHB and SIDBI for fresh lending during 2021-22. It also enhanced aggregate ways and means advances limits to states to Rs 47,010 crore.
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