RBI ensures adequate liquidity to all sectors
Reserve Bank of India who surprised the market with 25 bps rate cut ensures that there will be no scarcity of funds to any sector as indicated by the Governor Shaktikanta Das. Das told reporters that they will continuously monitor the liquidity situation and will make sure that there is no liquidity scarcity to any sector. The totaly liquidity injected through the open market operations has reached Rs 2.36 lakh crore.
RBI reduced the repo rate by 25 points to 6.25 percent and also changed the policy stance to ‘neutral’ from the early ‘calibrated lightening’as reviewed in the sixth bi-monthly monetary policy. The central bank cuts its headline inflation, which cooled off to 18 month low of 2.2% in December and expects the number to be at 2.8% in the March quarter, 3.2 – 3.4% in the first half of the next fiscal and 3.9% in the third quarter of FY20.
Das said that the impact of various budget proposals and a possibility of fiscal slippages had been taken into account while revising the inflation projections. As the dividend payment is badly needed for the government to meet its upwardly revised fiscal deficit target, Das said that this is a legal provision and in the next meeting they will decide on the quantum and the timing, and it is up to the government to decide how to spend it. And he added that the RBI expects the GST collections to pick up the line with budget expectations which is projected to clip over 18%.