RBI Guv Shaktikanta Das kept the repo rate the same at four percent in MPC meetA continued policy accommodation is needed as the economic healing still stays delicately poised and the growth is yet to take firmer roots, with the rise of inflation less steeper than anticipated, Reserve Bank of India (RBI) Governor Shaktikanta Das said in the minutes of the most recent monetary policy committee (MPC) meeting.The nation's genuine gross domestic product (GDP) broadened by 20.1 percent year-on-year throughout the first quarter of the existing financial, driven by a big favourable base result.
Nevertheless its momentum was dragged down by the second wave of the pandemic.
The level of genuine GDP in Q1 was 9.2 per cent below its pre-pandemic level two years back, stated RBI Governor Shaktikanta Das.RBI Guv highlighted that the external environment - which had actually been encouraging of aggregate demand over the previous few months, might lose momentum for a number of reasons such as an unexpected rise in infections, persistence of Covid-related supply bottlenecks, a binding shortage of key inputs like semi-conductors, and the spike in gas costs.
Offered an ever evolving and dynamic environment, with the outlook overcast by a number of unpredictabilities including the fact that the pandemic is far from over, we need to guarantee that the nascent revival of financial activity shows indications of resilience and sustainability, stated the RBI Governor.In the previous policy review meeting held in August, MPC member Jayant Varma said that the borrowing rate must be revised, and in the latest conference, reiterated his call to raise the reverse repo rate and likewise, modify the accommodative monetary policy stance.
Raising efficient money market rates rapidly towards 4 per cent would demonstrate the MPC's commitment to the inflation target said Mr Varma.In its 4th bi-monthly monetary policy evaluation for the fiscal year 2021-22 announced on October 8, the RBI kept the status quo for the eighth time in a row, keeping the key loaning rates steady.The repo rate- the crucial interest rate at which the RBI lends cash to commercial banks was kept constant at four percent, and the borrowing rate or reverse repo rate - the rate at which the RBI obtains cash from banks, was kept unchanged at 3.35 per cent.The central bank also retained the gdp (GDP) growth projection for the existing financial at 9.5 per cent, however, it trimmed the CPI inflation projection to 5.3 percent from 5.7 per cent for the financial, on the trajectory being more favourable than anticipated.