'Glucose' to reduce recession interest rates: Reduction in repo rate by 0.25%

No need to worry about banks, the entire banking system including co-operative banks is strong and stable: Shaktikanta Das

(PTI) Mumbai, Ta. 4 October 2019, Friday

The Reserve Bank of India (RBI) has set a record low for the fifth time in a row. RBI has reduced the repo rate by 0.25 percent to 5.15 percent. Earlier in March 2010, the repo rate was five percent. In addition to the repo rate, reverse repo rate has been reduced. The reverse repo rate has been reduced to 4.9 percent.

All six members of the RBI's Monetary Policy Committee (MPC) were in favor of lowering interest rates. RBI has reduced GDP estimates from 6.9 percent to 6.1 percent for the financial year 2019-20.

Earlier, the RBI had projected GDP at 6.9 per cent for 2019-20, but in the April-June quarter, the RBI, which had a five per cent GDP, reduced the GDP estimate for fiscal 2019-20 to 6.1 per cent.

The interest rate has been reduced four times in the current financial year. The interest rate was reduced by 1.10 per cent. Due to the trade war between the United States and China, the central banks of many countries are reducing interest rates to ease the recession that has plagued the world.

There is no need to worry about the banking system and the entire banking system, including co-operative banks, is strong and stable, "Reserve Bank of India (RBI) Governor Shaktikanta Das said today.

Das further said that in view of the situation created by the Punjab and Maharashtra Cooperative (PMC) bank, the RBI is reviewing the rules of conduct for cooperative banks and it will be discussed with the government in this regard.

This statement of the RBI is important because the PMC is the 24th Co-operative Bank in 2019 which has been placed under the control of the RBI. It may be mentioned that the interference of states in co-operative banks is high and there is also a high degree of intervention.

Key points of RBI monetary policy

Reducing interest rates for the fifth time in 2019, reduced the repo rate by 0.25 percent to 5.15 percent

* GDP estimates for the current financial year were reduced from 6.9 percent to 6.1 percent

* RBI is steadily reducing interest rates to boost economic growth

* Inflation is projected to be 3.5% to 3.7% in the last six months of the current financial year

* Foreign Exchange Reserve on October 1 $ 434.6 billion

* All members of RBI's Monetary Policy Committee (MPC) favor reduction of interest rates

* RBI will review next fiscal policy from December 3 to 5

For the fifth time this year, the repo rate was reduced: a total of 1.35% reduction so far this year.

RBI reduced GDP estimate for 2019-20 by 6.1%

RBI estimates GDP will be seven percent in 2020-21

(PTI) Mumbai, Ta. 4

The RBI has projected GDP to be 6.1% in FY 2019-20. The RBI had earlier projected 6.9 per cent GDP in 2019-20. In the first quarter of 2019-20, the GDP, which is 5% of GDP, has been reduced from 6.9% to 6.1%.

However, the RBI is expecting GDP to rise in the third and fourth quarters of 2019-20. It is worth mentioning that a number of steps have been taken by the government to reduce the corporate tax to increase GDP.

The RBI has stated that after the first quarter had a GDP of 5%, the remaining three quarters will now see an increase in GDP. The RBI has said that the impact of the reduction in interest rates and the 10 percent reduction in corporate tax by the government will have an impact on the next quarter's GDP.

According to RBI estimates, GDP in the second quarter of 2019-20 will be 5.3 percent, third quarter 6.6 percent and fourth quarter 7.2 percent. According to the RBI, GDP will be seven percent in 2020-21.

The RBI, on the other hand, has increased inflation estimates. RBI estimates that in the second quarter of 2019-20, inflation will be 3.4 per cent while inflation will be between 3.5 per cent and 3.7 per cent in the last six months of 2019-20. In the first quarter of fiscal year 2020-21, inflation will be 3.6%.