RBI Monetary Policy Committee keeps Repo rate unchanged at 4%

New Delhi: The Governor of the Reserve Bank of India, Shri Shaktikanta Das has announced that the Policy Repo Rate will remain unchanged at 4% and that the Marginal Standing Facility and Bank Rate will remain at 4.25%.

The Reverse Repo Rate too will remain unchanged at 3.35%. He informed that the Monetary Policy Committee was of the view that policy support from all sides is required to gain growth momentum and to nurture recovery after it takes root. “Hence policy rate has been left unchanged and an accommodative stance has been decided to be continued as long as necessary to revive and sustain growth, while ensuring inflation remains within target” the Governor said  while delivering RBI’s bi-monthly monetary policy statement through an online address.

Economy projected to grow at 9.5% in 2021-22

The Governor informed that according to the RBI, Real GDP growth is projected to grow at
9.5% in 2021-22. Explaining the basis for this, he noted that unlike the first wave, impact on economic activity is expected to be relatively contained in the second wave, with restrictions on mobility being regionalised and nuanced.

While urban demand slowed in April and May 2021, the vaccination process is expected to gather steam in coming months and should help to normalise economic activity. The rebound in global trade is expected to support India’s export sector. He observed that rural demand is expected to remain strong, due to forecasts of a normal monsoon.

The Governor announced that the Consumer Price Index inflation is projected at 5.1% in 2021-22.