MUMBAI, Feb 7: Governor Shaktikanta Das Thursday said the Reserve Bank of India, which surprised the market with 25 bps rate cut, will ensure there is no scarcity of funds to any sector.
“We are continuously monitoring the liquidity situation and will ensure that there is no liquidity scarcity to any sector,” Das told reporters at the customary post- policy presser. So far this fiscal year, total durable liquidity injected through open market operations has reached Rs 2.36 lakh crore.
In the sixth bi-monthly monetary policy review Thursday the RBI surprisingly reduced the repo rate by 25 basis points to 6.25 percent and also changed the policy stance to ‘neutral’ from the earlier ‘calibrated tightening’, signalling further softening on its approach to rates.
The central bank also cut its estimates on headline inflation, which cooled off to an 18–month low of 2.2 percent in December–for the next year, and expects the numbers to print in at 2.8 percent in the March quarter, 3.2-3.4 percent in first half of the next fiscal and 3.9 percent in the third quarter of FY20.
Das said the projected numbers are contingent on a normal monsoon, and no negative surprises on the crude prices. He also said there is no room for any rate action till the time inflation comes below the mandated 4 percent.
He said the impact of various budget proposals and a possibility of fiscal slippages have been taken into account while revising the inflation projections.
Deputy governor Viral Acharya said the RBI doesn’t have a target for real interest rates.
Stating that the impact of various budgetary proposals are factored into inflation projections, the RBI also said the new inflation projections factor in the possibility of fiscal slippages.
On the interim dividend payment which is badly needed for the government to meet its upwardly revised fiscal deficit target, Das said this is a legal provision and the next board meeting salted for February 18 will decided on the quantum and the timing, and that it is up to government to decide how to spend it.
Das also said the RBI expects the GST collections to pick up in line with budget expectations which is projected to clip over 18 percent.
Acharya said there is no proposal on the RBI table seeking modifications to the February 12, 2018 circular on NPA recognition. (PTI)
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