*Highlights of RBI Governor Das' address post MPC meeting*
*KEY TAKEAWAYS*
* MPC voted to leave repo rate unchanged at 4.00%
* Reverse repo rate also left unchanged at 3.35%
* MPC voted unanimously in favour of resolution
* MPC voted to continue with accommodative stance
* Space for further rate action available
* Space for further policy action must be used judiciously
* MPC sifted through domestic, global developments
* High-frequency data levelled off due to reclamping of lockdowns
*INFLATION*
* MPC expects CPI inflation to remain elevated in Jul-Sep
* MPC expects CPI inflation to ease in Oct-Mar
* Three-month CPI expectation lower than previous estimate
* CPI inflation pressures evident across all sub-groups
* Upside risk to food prices remain
* Supply chain disruption due to lockdowns persist
* Food inflation outturn could improve on bumper rabi crop
* CPI in most emerging markets rose on cost push pressures
* CPI inflation largely subdued across advanced economies
* MPC conscious of its inflation target
* MPC decided to stay pat due to uncertain CPI outlook
* MPC watchful of durable fall in inflation
*INDIAN ECONOMY*
* Economic activity in India has started to recover
* Kharif sowing suggests recovery in rural econ may be robust
* See GDP contracting in Apr-Sep
* Expect FY21 GDP growth to be in negative zone
* Fall in imports reflect weak domestic demand, fall in oil
* FX reserves at $534.6 bln as on Jul 31
*GLOBAL SCENARIO*
* Global economic activity was fragile in Jan-Jun
* Global economic activity remains fragile
* Resurgence in COVID cases led to subdued revival in major economies
* Global financial markets buoyant
*RATE TRANSMISSION*
* Past rate cuts working their way through economy
* Often hear questions on effectiveness of rate cut since Feb
* Adequate liquidity has been key to monetary transmission
* Easing of financial conditions enhanced monetary transmission
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