Inflation rate raised, and other RBI monetary policy higlights

The following are the highlights of the second bi-monthly monetary policy announced by the RBI on Thursday:

• Repo rate reduced by 25 bps to 5.75 pc for third time in a row
• Reverse repo rate now stands at 5.50 pc, marginal standing facility (MSF) rate 6 pc
• RBI changes policy stance to accommodative from neutral
• Cuts GDP growth forecast to 7pc from 7.2 pc for FY20       
• Raises retail inflation forecast for Apr-Sept to 3-3.1 pc and 3.4-3.7 pc in Oct-Mar
• Projects upward bias in food inflation in near term due to rising prices of food items
• Forecast risks to inflation trajectory from monsoon uncertainties, unseasonal spike in vegetable prices, crude oil prices, financial market volatility and fiscal scenario
• Waives RTGS and NEFT charges to promote digital transactions
• Sets up a panel to review ATM charges, fees levied by banks
• To issue draft guidelines for 'on tap' licensing of small finance banks by Aug 
• Flags sharp slowdown in investments, moderation in private consumption growth as concern
• All six MPC members voted in favour of 0.25 pc policy rate cut
• Average daily surplus liquidity in the system at Rs 66,000 crore in early June
• Foreign Exchange Reserves stood at USD 421.9 billion on May 31, 2019
• The next monetary policy statement is scheduled for August 7.