Here Are The Highlights Of RBI's Monetary Policy Committee Off-Cycle Meeting

Following are the highlights of the decisions taken in the off-cycle meeting of RBI's Monetary Policy Committee:

• The benchmark policy rate (repo) is hiked by 40 bps to 4.40 per cent with immediate effect.
• First hike in policy rate since August 2018 to increase the cost of borrowing for corporates, and individuals.
• Cash reserve ratio hiked by 50 bps to 4.5 per cent effective May 21.
• MPC held an off-cycle meeting on May 2 & 4 to reassess evolving inflation-growth dynamics.
• RBI also decides to remain accommodative while focusing on withdrawal of accommodation to ensure inflation remains within target going forward.
• Global commodity price dynamics driving the path of food inflation in India. 
• Inflation is expected to rule at elevated levels, warranting resolute and calibrated steps to anchor inflation expectations and contain second-round effects. 
• Renewed lockdowns & supply chain disruptions due to the resurgence of Covid-19 infections in major economies could sustain higher logistics costs for longer. 
• Indian economy appears capable of weathering deterioration in geopolitical conditions.
• A jump in fertilizer prices and other input costs has a direct impact on food prices in India.
• Spillovers from global wheat shortages impact domestic prices, even though domestic supply remains comfortable. 
• The next meeting of the MPC is scheduled during June 6-8.