RBI Monetary Policy: Experts DECODE announcements with Anil Singhvi

RBI Monetary Policy Review: The Monetary Policy announcements were not as per the expectations, expert Atul Joshi said as he was expecting bigger announcements for industry and not just the SMSE sector. He was giving his first reactions to the monetary policy announcements.

The contact intensive sectors like hotels and restaurants have been give a facility of Rs 15,000 cr. But these sectors are already into default situation especially smaller ones. The RBI policy itself says that such companies who are already in default cannot be given fresh credit. It needs more clarification from the RBI, he further said.

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He however lauded the announcements related to SIDBI where the Governor Das has announced a liquidity of Rs 16,000 cr. It is to be seen how much of the Rs 15,000 cr given last year has been utilised, Joshi said.  

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#RBICreditPolicy | इंडस्ट्री को रिवाइव करने के लिए MSME से फोकस हटाकर पूरी इंडस्ट्री पर फोकस बढ़ाना होगा, जिसका ऐलान नहीं हुआ: अतुल जोशी, फाउंडर & CEO, ऑयस्टर कैपिटल#RBI #CreditPolicy #ShaktikantaDas @AnilSinghvi_ pic.twitter.com/9s2KTI1abD

— Zee Business (@ZeeBusiness) June 4, 2021

• He was also of the view that the sequential lockdowns from states may impact the economy for the next 7-8 months. He also said that he did not expect rate increase in FY22 as the Governor indicated in this policy announcement that any rate increase would be on the back of sustainable growth.    
• Another expert Ajay Bagga said that he wanted to here some measures on moratorium.  
• Key highlights of the MPC statement –  
• Today’s statement consisted of 4 parts – liquidity and financial, additional measures and    
• -MPC maintains status quo and kept repo rate at 4 per cent, reverse repo rate unchanged at 3.35 per cent
• -Maintains accommodative stance as long as necessary. Decision unanimously taken by MPC members  
• -MSF and bank rate unchanged  
• -Focus on the revival of domestic economy
• -Urban demand reflected in high frequency indicators remained moderated in April and May
• -Domestic, financial conditions remain accommodative
• -Real GDP expected at 9.5 per cent, revised from earlier 10.5 per cent
• -Inflation estimates for FY22 ay 5.1 per cent  
• -Q3 GDP growth estimates at 7.2 per cent while Q4 GDP growth estimates at 6.6 per cent
• -Q1 FY22 GDP growth estimates at 18.8 per cent while inflation at 5.2 per cent
• -RBI to take all measures to ensure growth
• -RBI to buy GSAP worth Rs 10,000 cr on 17 June
• -RBI to buy GSEC worth Rs 1.2 lakh cr in second half of FY22  
• -GDP growth estimates at 7.9 per cent for second half of FY22
• -Decrease in urban consumption to impact growth

The three-day MPC meeting held between 2-4 June was the 29th meeting of the monetary policy committee.