Highlights of off-cycle meeting RBI's Monetary Policy Committee

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

* Benchmark policy rate (repo) hiked by 40 bps to 4.4 pc with immediate effect

* First hike in policy rate since August 2018 to increase cost of borrowing for corporates, individuals

* Cash reserve ratio hiked by 50 bps to 4.5 pc 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 path of food inflation in India

* Inflation 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 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

* Jump in fertiliser prices and other input costs has direct impact on food prices in India

* Spillovers from global wheat shortages impacting domestic prices, even though domestic supply remains comfortable

* Next meeting of the MPC is scheduled during June 6-8.