Highlights of RBI Bi Monthly Monetary Policy

RBI Bi Monthly Monetary Policy

RBI Bi Monthly Monetary Policy 2018-19 – Check the Highlights of Fourth RBI Bi Monthly Monetary Policy

RBI Bi Monthly Monetary Policy

Reserve Bank has recently launched its fourth Bi-Monthly Monetary Policy Rates for the year 2018-19 on 5th October 2018 in Mumbai. The Reserve Bank of India’s monetary policy committee (MPC) has decided not to increase the repo rate this time. Although RBI has not increased the lending rates for public, any bank can change their policy. Read this article to know more about Fourth RBI BI MOnthly Monetary Policy.

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Current Policy Rates and Reserve Ratios – RBI Bi-Monthly Monetary Policy

 Policy Rate
 Policy Repo Rate  6.50%
 Reverse Repo Rate  6.25%
 Marginal Standing Facility Rate  6.75%
Bank Rate  6.75%
CRR  4%
SLR  19.5%

Important Highlights of RBI Bi Monthly Policy 2018-19

  • RBI has not raised the key repo rate from 6.50%.
  • Although RBI has kept rates unchanged, now it is up to the banks on whether they will keep interest rates where they are or raise them.
  • Many banks have been increasing their interest rates even before the RBI hiked repo rate for the first time in June.
  • The country’s largest lender ‘State Bank of India’ raised its MCLR by 5 basis points.
  • Mortgage lender, HDFC has raised its retail prime lending rate by 10 basis points.
  • If you are planning to take a home loan, you should not wait any longer.
  • The reverse repo rate remained the same at 6.25%.
  • Projects retail inflation to rise from 3.8-4.5 Pc and will effect from October – March.
  • Geopolitical risks, global financial market volatility and the threat of trade protectionism are sure to impact domestic growth.
  • Crude oil prices and uncertain global financial markets development risk to the inflation outlook.

Know About Repo Rate and Reverse Repo Rate

Repo Rate – It is the rate at which RBI lends the money to commercial banks in the event of the scarcity of funds.

Reverse Repo Rate – Vice Versa! The rate at which RBI borrows money from commercial banks.

Bank Rate – It is the rate of interest implemented by RBI while lending money to any public sector bank on a long-term basis. The period may range from 90 days to 1 year.

Cash Reserve Ratio – The fund amount that the banks need to keep with the RBI. The current CRR is 4%

Statutory Liquidity Ratio (SLR) – It is the minimum percentage of deposits the bank has to maintain in the form of gold, cash or other approved securities.

We hope that you have gathered all the necessary information from our article on Fourth RBI Bi Monthly Monetary Policy. In case you have any query, you can comment anytime in the comments box below. We would be more than happy to help you.

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