RBI Monetary Policy Insights

Question 1

What is the new policy repo rate set by the RBI?

Answer 1

5.50%

The repo rate was cut by 50 basis points.

Question 2

By how much has the RBI reduced the cash reserve ratio (CRR)?

Answer 2

100 basis points

The reduction will occur in a staggered manner over the year.

Question 3

How much primary liquidity is expected to be released to banks by year-end?

Answer 3

₹2.5 lakh crore

This release aims to reduce the cost of funds.

Question 4

What is the GDP growth projection maintained by the RBI?

Answer 4

6.5%

This is for the financial year 2025-26.

Question 5

What was the voting outcome of the RBI’s Monetary Policy Committee on the repo rate cut?

Answer 5

5:1

This indicates a majority agreement on the decision.

Question 6

What is the staggered CRR reduction schedule?

Answer 6

Four cuts of 25 bps, effective from September 6, October 4, November 1, and November 29

Each cut will reduce the CRR to 3% of net demand and time liabilities.

Question 7

What is the target consumer price index (CPI) inflation set by the RBI?

Answer 7

4% within a band of +/- 2%

This target supports growth while controlling inflation.

Question 8

What is the revised CPI inflation projection for 2025-26?

Answer 8

3.7%

Previous projection was 4%.

Question 9

What are the projected CPI inflation rates for Q1 to Q4 of 2025-26?

Answer 9

• Q1: 2.9%
• Q2: 3.4%
• Q3: 3.9%
• Q4: 4.4%

These projections indicate a gradual increase in inflation throughout the year.

Question 10

What change did the MPC make to its policy stance?

Answer 10

From accommodative to neutral

This change allows for potential future rate hikes if inflation trends change.

Question 11

What factors are contributing to the expected improvement in investment activity?

Answer 11

• Higher capacity utilisation
• Improving balance sheets of corporates
• Government’s capital expenditure push

These factors support a more favorable investment environment.

Question 12

True or False: The RBI expects continued momentum in Indian economic activity despite global uncertainties.

Answer 12

True

This expectation is based on private consumption and fixed capital formation.

Question 13

What segment is experiencing persistent stress according to Mr. Malhotra?

Answer 13

Micro-finance segment

Stress in unsecured personal loans and credit card receivables has abated.

Question 14

Fill in the blank: The RBI’s Monetary Policy Committee will assess incoming data to strike the right _______.

Answer 14

[growth-inflation balance]

This assessment is crucial given the fast-changing global economic situation.