RBI Keeps Repo Rate Unchanged at 4%, FY22 Real GDP growth retained at 9.5%

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Mumbai : The Reserve Bank of India on Friday decided to keep the key policy rate unchanged. Whlie Repo rate has been unchanged at 4%, the Reverse Repo also unchanged at 3.35%, bank rate at 4.25%.

“On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today (August 6, 2021) decided to  keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 4.0 per cent.  Consequently, the reverse repo rate under the LAF remains unchanged at 3.35 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 4.25 per cent. The MPC also decided to continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward.  These decisions are in consonance with the objective of achieving the mediumterm target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth” said RBI Governor Shaktikanta Das.

“Economic activity has broadly evolved along the lines of the Monetary Policy Committee’s expectations in June and the economy is recovering from the setback of the second phase of COVID19” he said.

He added that CPI inflation is projected at 5.7 % during 2021-22 – this consists of 5.9% in Q2, 5.3% in Q3 and 5.8% in Q4 of 2021-22 with risks broadly balanced. CPI inflation for the first quarter of 2022-23 is projected at 5.1%

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