RBI releases bi-monthly policy

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News:The Reserve Bank of India released its bi-monthly monetary policy committee(MPC) report.

Facts:

Key Highlights from the report:

  • Repo Rate:It is the rate at which the RBI lends money to the banks for a short term.It remains unchanged at 5.15%.
  • Reverse Repo Rate:It is the short term borrowing rate at which RBI borrows money from banks.It also remained unchanged at 4.9%.
  • Marginal Standing facility:It is a window for banks to borrow from the Reserve Bank of India in an emergency situation when interbank liquidity dries up completely.It has been kept at 5.4%.
  • Growth:The GDP growth for the financial year 2020-21 is projected at 6%.
  • Inflation:The estimation for the consumer price index-based inflation has been kept at 5.0-5.4% for the first half of 2020-21.

Additional information:

About Monetary Policy Committee(MPC):

  • The Monetary Policy Committee(MPC) is a committee of the Reserve Bank of India.
  • The MPC is made up of six members with three nominated by the Union government and three representing the RBI.
  • The MPC is mandated by law to ensure that retail inflation stays within a band of two percentage points of the target inflation rate of 4%