• Weak Rupee not Enough to Tip the Scale in Favour of India’s Export.
• Rupee Slips 15 paisa to 69.01 against US Dollar.
• Corporation Bank to Raise Rs 2,555 crore by Issuing Shares to Government.
• PNB gets Rs 2,816 cr as part of govt capital infusion plan
• Bank of Maharashtra signs ICA pact with banks to deal with stressed assets (BOM).
• Sensex Breaches 37,000 for First Time, Nifty at a Record High.

RBI Repo Rate Increased to 6.50% –

The 6-member Monetary Policy Committee (MPC), headed by RBI Governor Urjit Patel, started the three-day deliberations as on 30th July 2018 to decide on the key interest rate amid elevated oil prices and inflation hovering around 5 percent. The MPC is holding the third bi-monthly meeting for Monetary Policy Statement for 2018-19. In this meeting, the Monetary Policy Committee (MPC) of RBI has once again increased the benchmark Repo Rate by 25 basis points (bps) to 6.50%, while adjusting Reverse Repo Rate at 6.75%. Read this article to know all about Monetary Policy & it’s consequences on daily life. Moreover this article will also help you prepare banking awareness for upcoming exams like IBPS RRB, SBI PO, SBI Clerk, IBPS PO, SBI SO, SSC etc.

What is RBI Monetary Policy? –

Monetary policy is basically managed by the Central bank of the Country i.e Reserve Bank of India. It is also known as the ‘credit policy‘.

It controls the money supply & amount of credit in the economy. Through credit policy RBI controls these rates like Bank Rates, MSF, Repo Rate, Reverse Repo rate & Statutory Liquidity Ratio in order to manage price stability in the economy. The new values are as follow:

Repo Rate – 6.50%
Reverse Repo Rate – 6.25%
Marginal Standing Facility – 6.75

Main Objectives of RBI Monetary Policy –

The Main objectives of monetary policy are:

• Price stability
• Exchange Rate Stability
• Infaltion targetting
• Economic Growth

RBI Policy Change –

In the recent sitting of the Monetary Policy Committee (MPC) the Repo Rate has been hiked. MPC has attributed the hike to robust corporate earnings especially of FMCG companies, buoyant rural demand with good monsoon and raise in MSPs by the government. The decision is consistent with the neutral stance of monetary policy with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 percent. RBI has also increased the reverse repo rate and the Marginal Standing Facility has also been increased to 6.25% and 6.75% respectively. The MPC has  also retained the GDP growth projection for 2018-19 at 7.4 per cent.  The next meeting of the MPC is scheduled from October 3 to 5, 2018.