Jubilee Post News & Views
News Desk
Much along the expected lines of the financial experts, the RBI kept repo rate untouched at 4% and reverse repo rate at 3.35% amid a recent rise in retail consumer prices, in its monetary policy.
The RBI was expected to do all it can to keep the inflation rates reined in for the duration. MPC has decided that the repo rate will remain unchanged amid the possibility of a high inflation. Shaktikanta Das announced Rs 10,000 crore at repo rate to NABARD and NHB to alleviate the liquidity crisis.
RBI Governor Shaktikanta Das announced that the repo rate will remain unchanged. The RBI MPC has unanimously voted to maintain the status quo on policy rates. Shaktikanta Das added that the MPC will remain watchful with respect to inflation dynamics to further use space available on the monetary side when appropriate.
The RBI Governor also announced stimulus measures, which included additional liquidity of Rs 10,000 crore at repo rate to NABARD and NHB. The enhanced finance flow should see developers in need of last mile funding being able to complete their stalled projects, said Niranjan Hiranandani, President – Assocham and Naredco.
In an effort to mitigate the impact of COVID-19 on households, the RBI has increased the permissible loan to value ratio (LTV) for loans sanctioned against pledge of gold ornaments and jewellery for non-agricultural purposes from 75 per cent to 90 per cent till 31 March 2021.
However, the RBI announced several additional measures that will go on to accelerate the economy, enhance liquidity, improve flow of credit and deepen digital payment facilities, among others. Commendably, its allotment of INR 5,000 crore each to National Housing Bank and NABARD is a much-needed step for sectors including real estate reeling under the liquidity crisis. It will help infuse capital into the HFCs and eventually provide relief to developers battling liquidity issues in COVID-19 times.
