RBI Governor Shaktikanta Das said that the MPC voted unanimously to hold rates.New Delhi: The Reserve Bank of India's (RBI's ) Monetary Policy Committee on Wednesday maintained status quo on key interest rates as the new strain of coronavirus - Omicron - addedto the economic uncertainties.The Reserve Bankkept reporate at an all-time low of 4 per cent and the reverse repo rateat 3.35 per cent.
Repo rate is the rate at which the RBI lends money to commercial banks; while reverse repo rate is the rate at which the Reserve Bank borrows from the banks.The central bank has kept the rates unchanged for ninthtime in a row.RBI Governor Shaktikanta Das said that the MPC voted unanimously to hold rates and maintain an accommodative stance as long as necessary to push growth while ensuring inflation remains under control.On the economic front, the RBI retainedGDP (gross domestic product) growth target at 9.5 per cent for the current financial year, the Governor mentioned.
Retail inflation was projected at 5.3 per cent for FY22, he added."The MPC expectedly maintained status quo on the policy rates and stance.
The rhetoric too has remained focused on maintaining durable growth as long as inflation remains well in check.
We continue to expect RBI to fine tune the surplus liquidity to manage rates and consequently provide guidance on the operating target rate shifting closer to the Repo rate.
We retain our base case of reverse repo rate hike in February," said Upasna Bhardwaj, Senior Economist at Kotak Mahindra Bank.The central bank had last revised the policy rate on May 22, 2020, in an off-policy cycle to boost demand by cutting interest rate to a historic low.The RBI has been mandated by the government to ensure that the retail inflation based on the Consumer Price Index (CPI) remains at 4 per cent with a margin of 2 per cent on either side.Meanwhile, the domestic stock indices rallied with the benchmark BSE Sensex rising more than 700 points.As of 10:12 am, Sensex was 1.28 per cent or 740 points higher at 58,380; while the broader NSE Nifty was trading above 17,350.