11-12-2020 | 14:17 PM
RBI Monetary Policy Committee
The RBI recently held its Monetary Policy Committee meet. During the meet, the Reserve Bank of India has kept the repo rate unchanged at 4%.
Key Points:
● The rate of repo is the rate at which RBI loans to banks. The Reverse Repo Rate is expected to remain at 3.35 per cent.
● Inflation: The inflation rate held steadily above the upper end of the RBI inflation range of 2% to 6% despite the COVID-19 crisis.
● Retail inflation measured on the basis of the CPI started to increase to 7.61 per cent by October 2020. This is the fastest rate of retail inflation since May 2014. It was 8.33% in May 2014.
About Marginal Standing Facility?
● Marginal standing facility is a method to improve liquidity by borrowing RBI capital. It was implemented during the monetary policy adjustment exercise in 2011-12.
● This loan is at an interest rate above the rate of repo. The penalty interest rate is called the MSF rate.
