New Delhi: Reserve Bank of India (RBI) today decided to maintain status quo in policy rates for the eighth consecutive time, Governor Shaktikanta Das has announced. RBI has kept repo rate unchanged at 4 per cent while maintaining an accommodative stance. The reverse repo rate also remained at 3.35 per cent as widely expected. Apart from these, RBI has retained Gross Domestic Product (GDP) growth target at 9.5 per cent for the ongoing Financial Year of 2021-22.
The decision was taken by the six-member Monetary Policy Committee (MPC) of India’s central bank. The announcement has come amid rising global commodity prices and the need to contain inflation at home. The central bank had last revised the policy rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting interest rate to a historic low.
RBI Monetary Policy Today Highlights
- The projection for real GDP growth is retained at 9.5 per cent for FY 2021-22. This consists of 7.9 per cent in Q2, 6.8 per cent in Q3 and 6.1 per cent in Q4 of 2021-22. Real GDP growth for Q1 of FY 2022-23 is projected at 17.2 per cent, RBI Governor said today.
- The benchmark Consumer Price Index (CPI) inflation is projected at 5.3 per cent for the financial year 2022. CPI inflation for Q1 of FY 2022-23 is projected at 5.2 per cent, said RBI Governor Shaktikanta Das.
- Governor Das said MPC voted unanimously for keeping interest rate unchanged and decided to continue with its accommodative stance as long as necessary to support growth and keep inflation within the target.
- “The recovery of Indian economy is gaining traction; it’s in better shape than last MPC meeting. Growth impulses strengthening, inflation trajectory favourable than anticipated; hope to sail towards normal times, due to resilience of economic fundamentals of our economy,” Governor Das noted.
- Notably, the rate-setting panel of India’s central bank began its three-day deliberations on the next bi-monthly monetary policy on Wednesday.
- Ahead of the key event, share market has opened in green on Friday. BSE Sensex has jumped 223.79 points to 59,901.62 in opening session and NSE Nifty advanced 77.75 points to 17,868.10, as per a PTI report.
The RBI has been asked by the central government to ensure that the retail inflation based on the Consumer Price Index remains at 4 per cent with a margin of 2 per cent on either side. The Reserve Bank had kept the key interest rate unchanged in its after monetary policy review in August citing inflationary concerns.
The CPI inflation was at 5.3 per cent in August. The inflation data for September is scheduled to be released on October 12.
Get real time update about this post directly on your device, subscribe now.