RBI sees strong signs of Recovery, keeps Repo Rate Unchanged at 4%

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Mumbai: The Reserve Bank of India (RBI) on Friday kept Repo Rate unchanged at 4% and Reverse Repo at 3.35%. The Monetary Policy Committee (MPC), after its deliberations of the macroeconomic and financial developments, has unanimously decided to continue with the accommodative stand on monetary policy.

“The MPC voted unanimously to leave the policy repo rate unchanged at 4 per cent. It also unanimously decided to continue with the accommodative stance of monetary policy as long as necessary – at least through the current financial year and into the next year – to revive growth on a durable basis and mitigate the impact of COVID-19, while ensuring that inflation remains within the target going forward. The Marginal Standing Facility (MSF) rate and the Bank rate remain unchanged at 4.25 per cent. The reverse repo rate stands unchanged at 3.35 per cent” said RBI Governor Shaktikanta Das.

Signs of recovery have strengthened further since the last meeting of the MPC. Consumer confidence is reviving, and business expectations of manufacturing, services and infrastructure remain upbeat : RBI Governor.

He said that the outlook on growth has improved significantly, with positive growth impulses becoming more broad-based, and the rollout of the vaccination programme in the country auguring well for the end of the pandemic.

The central bank has estimated that the GDP growth will be improved to 10.5% in the 2021-22 financial year. Also, RBI has revised its projection for CPI inflation to 5.2 per cent for Q4 of the current (2020-21) financial year. The CPI Inflation is projected to be at 5.2 per cent to 5.0 per cent in H1 FY 22 and 4.3 per cent for Q3 FY 22, with risks broadly balanced.

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