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RBI’s 3rd Bi-Monthly Monetary Policy Statement 2020-21

Published on October 09, 2020
Current Context: Shaktikanta Das, Governor of Reserve Bank of India (RBI) announced the 3rd Bi-Monthly Monetary Policy Statement for 2020-21.
RBI’s 3rd Bi-Monthly Monetary Policy Statement 2020-21
  • The Monetary Policy Committee (MPC) evaluated domestic and global macroeconomic and financial conditions and thus has kept the repo rate under the Liquidity Adjustment Facility (LAF) unchanged to 4%. 
  • The reverse repo rate under LAF is also kept unchanged to 3.35%. 
  • There is also no change in the Marginal Standing Facility (MSF) and Bank Rate which are at 4.25%. 
  • Another announcement includes that RBI will introduce on-tap Targeted Long Term Repo Operations (TLTRO) for the banks to borrow upto Rs 1 trillion from the window and invest in corporate bonds or debt instruments. The on-tap TLTRO will have tenors of upto 3 years at a floating rate linked to the policy repo rate. The on-tap TLTRO scheme will be available upto 3rd March 2021. 
  • The committee has predicted real GDP growth for FY 2021 to contract by 9.5%. 
  • Static Part: 
    • HQ of RBI: Mumbai
    • Composition of MPC: Shaktikanta Das (Governor of RBI), Dr Michael Debabrata (Deputy Governor of RBI), Dr Mridul K. Saggar, Prof. Ashima Goyal, Prof Jayanth R Varma and Dr Shashanka Bhide

Question: 

Q.1 As per RBI’s 3rd Bi-Monthly Monetary Policy Statement for 2020-21, reverse repo rate under LAF is at ____%?
a. 4.35%
b. 3.35%
c. 3.75%
d. 4.75%
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