The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) kept the repo rate unchanged at 4 percent maintaining the status quo for the third time in a row. The reverse repo rate stays at 3.35 percent.
Announcing the decision, RBI Governor Shaktikanta Das said, “Monetary Policy Committee (MPC) voted unanimously to keep the policy repo rate unchanged at 4 per cent.” He added that the MPC has also decided to maintain the accommodative stance.
“MPC decided to continue with accommodative stands of monetary policy as long as necessary, at least till current financial year and into next year to revive growth on a durable basis and mitigate the impact of coronavirus while ensuring that inflation remains within the target,” Shaktikanta Das said as reported by India Today.
Shaktikanta Das said the RBI is ready to take further measures to ease liquidity. “We will continue to respond to global uncertainty. Will use various instruments at an appropriate time to ensure ample liquidity is available in the system,” the RBI governor said
The RBI Governor further added that the central bank is committed to preserve depositors’ interest in the financial system and went on to add that “financial markets are working in orderly fashion.”
“The Marginal Standing Facility (MSF) rate and the bank rate remain unchanged at 4.25%. The reverse repo rate remains unchanged at 3.35 per cent,” Shaktikanta Das said, adding, the inflation is likely to remain elevated.
“The Monetary Policy Committee was of the view that inflation is likely to remain elevated with some relief in the winter months from prices of perishables and bumper Kharif arrivals,” he said.
Shaktikanta Das said the economy is recuperating faster with more sectors joining the recovery path. He said the real Gross Domestic Product (GDP) growth for 2021 is projected at minus 7.5 per cent. He said the Reserve Bank of India is projecting the GDP growth for Q3 at +0.1% and +0.7% for Q4.