Highlights of RBI's monetary policy statement

Mumbai, May 22 () Following are the highlights of RBI Governor Shaktikanta Das' statement and resolution of the Monetary Policy Committee (MPC): * RBI cuts repo rate by 40 bps to 4 pc * Reverse repo rate reduced to 3.35 pc * Second sharp reduction in key policy rates in 2 months * RBI advances MPC meeting to take key decisions * RBI Governor said it is in growth outlook that the MPC judged the risks to be gravest * GDP growth in FY21 estimated to remain in negative territory, with some pick-up in H2 * Top 6 industrialised states accounting for about 60 pc of industrial output largely in red/orange zones * High frequency indicators point to collapse in demand beginning in March * MPC opined macroeconomic impact of COVID-19 is turning out to be more severe than initially anticipated * Various sectors of economy are experiencing acute stress * Economic activity other than agriculture likely to remain depressed in Q1 due to lockdown * Inflation outlook highly uncertain * Moratorium on term loan instalments extended by another 3 months till Aug 31, 2020 * Lending institutions permitted to allow deferment of interest on working capital facilities till Aug 31 * RBI decides to extend time for completion of remittances against imports from 6 months to 12 months for imports made before July 31 * RBI extends a line of credit of Rs 15,000 crore to the EXIM Bank * Maximum permissible period of export credit increased to 15 months from 12 months * RBI announces measures to improve functioning of markets and market participants * Forex reserves increase by USD 9.2 bn in 2020-21 (up to May 15) to USD 487 bn. NKD ANS ANS