RBI MPC meeting LIVE Updates: RBI Governor Sanjay Malhotra in his address said the monetary committee has changed its stance to ‘neutral’ from accomodative. The RBI has also revised LTV rates for gold loans below ₹2.5 lakh to 85% from 75%
RBI MPC meeting LIVE Updates: The Reserve Bank of India (RBI) surprised the market with a 50 basis points (bps) cut in the benchmark repo rate to 5.5% at its second bi-monthly Monetary Policy Committee (MPC) meeting on June 6. The central bank also trimmed its inflation forecast for the year by 30 basis points to 3.7%, and slashed the cash reserve ratio by 100 basis points to 3%.
The CRR cut alone is estimated to release ₹2.5 lakh crore into the financial system. This is way more than the market had estimated and the cheer was palpable. Nifty Bank spiked more than 500 points from the day’s low immediately after Governor Sanjay Malhotra made the announcement.
A CNBC-TV18 poll had estimated a 25 basis points rate cut. The poll indicated that low inflation and slower-than-expected growth are key reasons behind the anticipated move. Inflation has stayed below the RBI’s 4% target, and first-quarter gross domestic product (GDP) growth is expected to miss earlier forecasts.
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