Reserve Bank of India (RBI) has
announced its third Bi-Monthly Monetary Policy Rates for 2018-19 in
Mumbai today.
The third Bi-monthly
policy has been released based on the assessment of the Monetary
Policy Committee of the Reserve Bank of India (RBI). Monetary Policy Rates are
crucial for the exam, especially Banking awareness.
The Reserve Bank of
India in its third Bi-Monthly statement 2018-19 has
made the following announcements -
- Increase the policy repo rate
under the liquidity adjustment facility (LAF) by 25 basis points
to 6.5%.
- Consequently, The reverse
repo rate under the LAF stands adjusted to 6.25%.
- The marginal standing
facility (MSF) rate and the Bank Rate to 6.75%.
- The decision of the MPC is
consistent with the neutral stance of monetary policy in consonance.
- Cash Reserve Ratio (CRR) remains
unchanged at 4%.
- The objective of achieving the
medium-term target for consumer price index (CPI) inflation of 4 per
cent within a band of +/- 2 per cent, while supporting growth.
Note:
- The Monetary Policy Committee
(MPC) will meet during July 30 to August 1, 2018 for the Third Bi-monthly
Monetary Policy Statement for 2018-19.
Current Policy Rates:
Policy Repo Rate
|
6.50 %
|
Reverse Repo Rate
|
6.25 %
|
Marginal Standing
Facility Rate
|
6.75 %
|
Bank Rate
|
6.75 %
|
Reserve Ratios:
CRR
|
4 %
|
SLR
|
19.5%
|
The remaining policy statements would be released by RBI as
stated below -
Policy Statement
|
Dates of Release
|
First Bi-monthly
Monetary Policy Statement for 2018-19
|
5th April 2018
|
Second Bi-monthly
Monetary Policy Statement for 2018-19
|
6th June 2018
|
Fourth Bi-monthly
Monetary Policy Statement for 2018-19
|
4th October 2018
|
Fifth Bi-monthly
Monetary Policy Statement for 2018-19
|
6th December 2018
|
Sixth Bi-monthly
Monetary Policy Statement for 2018-19
|
6th Feb 2019
|
Let us now understand some common terms of the Policy rates
-
Repo Rate
It is the rate at
which RBI lends money to commercial banks.
Reverse Repo rate
It is the rate at
which RBI borrows money from commercial banks.
Cash Reserve Ratio
(CRR)
The share of net demand
and time liabilities (deposits) that banks must maintain a cash balance
with the Reserve Bank.
Statutory Liquidity
Ratio (SLR)
The share of net demand
and time liabilities (deposits) that banks must maintain in safe and
liquid assets, such as, government securities, cash, and gold.
Bank Rate
It is the rate at which
the Reserve Bank is ready to buy or rediscount bills of exchange or other
commercial papers for the long term.
Marginal Standing
Facility Rate (MSF)
The rate at which
the scheduled banks can borrow funds from the RBI overnight, against the
approved government securities is termed as MSF.