The Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday, 10 February, announced that the Monetary Policy Committee (MPC) has voted to keep key policy rates, including repo and reverse repo rates, unchanged in its monetary policy review.
Accordingly, the repo rate remains unchanged at 4 percent and the reverse repo rate maintains status quo at 3.35 percent. Das said the RBI will continue with an accommodative stance as long as necessary.
This is in order to revive and sustain growth and mitigate the impact of COVID-19 on the economy, while ensuring inflation remains within target, Das said.
Meanwhile, Marginal Standing Facility Rate and Bank Rate remain unchanged at 4.25 percent.
Das also said that the RBI expects real Gross Domestic Product (GDP) to grow at 7.8 percent in FY22-23.
The CPI inflation projection, meanwhile, has been retained at 5.3 percent for FY 2021-22 and 4.5 percent for FY 2022-23.
Headline inflation is expected to peak in Q4 2021-22 within tolerance band and then come closer to target in second half of 2022-23, providing room for accommodative monetary policy, Das added.
Das started his address on Thursday saying that the pandemic has held the world economy hostage with economic activity, especially in contact-intensive sectors being dented across the world.
However, he pointed out that India is charting a different course of recovery from the rest of the world and is poised to grow at the fastest pace among major economies according to Internal Monetary Fund (IMF) projections.
This recovery is supported by large-scale vaccination and fiscal and monetary support, Das added.
First Policy Review After Budget Announcement
The six-member MPC headed by Das had started deliberations on the bi-monthly policy review on Tuesday.
This is its last bimonthly monetary policy review of the financial year 2021-22 and is important as it is the first policy review after the announcement of Union Budget 2022-23.
Ahead of the announcement, Sensex rose over 100 points while Nifty reached the 17,500-mark ahead.
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