INSUBCONTINENT EXCLUSIVE:
The RBI Governor Shaktikanta Das projected CPI inflation at 5.3 per cent for the current year
The Reserve Bank kept the key benchmark rates unchanged for the eighth consecutive time and promised to maintain
the status-quo on rates "as long as necessary to revive growth." The repo rate is unchanged at 4 per cent and the reverse repo rate is
steady at 3.35 per cent, the RBI Governor Shaktikanta Das said at the end of the bi-monthly Monetary Policy Committee (MPC) review meeting
that started on Wednesday
The Reserve Bank also retained an 'accommodative' monetary stance i.e.willingness to either cut the rates or keep them steady,
depending on the evolving situation.The central bank last cut its policy rates on May 22, 2020, in an off-policy cycle when the covid-19
pandemic first shook the country
The Reserve Bank has slashed its key lending rate i.e
repo rate by 115 basis points since March 2020 to cushion the economy from the aftershock of coronavirus.RBI Governor Shaktikanta Das has
retained real GDP growth projection at 9.5 per cent for FY2021-22, while highlighting that high-frequency indicators show that economic
activity has gained momentum in the second quarter.Recovery in demand gathered pace in August-September, and pick-up in import of cap goods
point to some recovery in activity, Shaktikanta Das pointed out.The Governor expressed confidence that pent-up demand and festival season
should further boost urban demand, He, however, cautioned that economic output is still below pre-covid levels.Rating agency Moody's had
recently upgraded India's rating outlook to "stable" from "negative." The global rating agency said economic recovery is in progress as
activity is gradually picking up and spreading across sectors.On inflation, the RBI Governor Shaktikanta Das projected CPI inflation at 5.3
per cent for the current year and asserted the central bank will ensure inflation remains within the target range, which is 2-6 per
cent.Meanwhile, India's services industry expanded for a second straight month in September, bolstered by improved domestic demand and
easing Covid-19 restrictions, pushing companies to hire more employees for the first time in nearly a year.The IHS Markit Services
Purchasing Managers' Index eased to 55.2 in September from August's 18-month high of 56.7, but stayed comfortably above the 50-mark
separating growth from contraction.India in a much better place today than at the time of the last MPC meeting; the growth impulses are
strengthening and inflation trajectory is more favourable than expected, Shaktikanta Das concluded.
