On October 1, the RBI’s Monetary Policy Committee (MPC) made the second consecutive decision to maintain the benchmark repo rate at 5.5 percent.
On October 1, the Reserve Bank of India (RBI) approved the investment of Special Vostro Account (SRVA) funds in commercial papers and corporate bonds.
This has broadened the investing horizon beyond government securities.
To encourage exports from India and to support the growing interest of the international trading community in the Indian rupee, the RBI allowed SRVA to simplify the invoicing, payment, and settlement of exports and imports in Indian rupees in July 2022.
In order to promote cross-border commerce, the RBI also permitted authorized dealer banks in India and their foreign branches to provide rupee loans to citizens of Bhutan, Nepal, and Sri Lanka, as well as banks in these nations.
The central bank also announced other steps to facilitate easier cross-border financing, such as adding a few of India’s main trade partners’ currencies to the list of reference rates that Financial Benchmarks India Limited (FBIL) publishes.
On October 1, the RBI’s Monetary Policy Committee (MPC) made the second consecutive decision to maintain the benchmark repo rate at 5.5 percent.
Additionally, the MPC maintained the “Neutral” attitude.
Before planning the next policy move, the MPC thought it wise to wait for the effects of previous ones to wear off.
Consequently, the marginal standing facility (MSF) rate and the bank rate stay at 5.75 percent, while the standing deposit facility (SDF) rate stays at 5.25 percent.
The move was consistent with a Moneycontrol survey of bankers and economists who said the RBI’s Monetary Policy Committee (MPC) would maintain rates while evaluating the data on the Goods and Services Tax (GST) changes. The MPC took comfort in the first quarter’s stronger growth.