RBI keeps rates unchanged, stance accommodative, BFSI News, ET BFSI

The Reserve Bank of India‘s Monetary Policy Committee has kept the repo rate at 4% and other rates unchanged. The RBI‘s Monetary Policy Committee also voted with a 5:1 majority to continue with an ‘accommodative’ stance as long as necessary to support growth.

Reverse repo rate remains at 3.35%, Marginal Standing Facility Rate and Bank Rate at 4.25% while the projection for India’s real Gross Domestic Product (GDP) is maintained at 9.5 per cent for FY22, RBI Governor Shaktikanta Das said while announcing the monetary policy review.

Inflation target raised

RBI has raised the CPI inflation estimate for FY22 to 5.7% from 5.1%.

“CPI inflation surprised on the upside in May; price momentum however moderated. Outlook for aggregate demand is improving but underlying conditions are still weak. More needs to be done to restore supply-demand balance in no. of sectors.

He said the recent inflationary pressures are evoking concerns but the current assessment is that these are transitory.

“We are in n a much better position as compared to June 2021. Need to remain vigilant on the possibility of a third wave,” he said.