Tag: status quo on key rates

The Monetary Policy Committee of the Reserve Bank of India has decided to maintain status quo on key policy rates.

The policy repo rate remains unchanged at four per cent.

“MPC voted unanimously to leave the policy repo rate unchanged at four per cent. The MPC also unanimously decided to continue accommodative monetary policy in the current fiscal and next year,”said RBI Governor Shaktikanta Das, who chairs the MPC, on Friday.

This would help spur growth while keeping inflation under control.

Significantly this was the first meeting of the MPC after the presentation of the Union Budget, which entails a massive borrowing plan including an additional ₹80,000-crore borrowing in the current fiscal.

The six-member MPC has cut interest rates by 115 basis points in the last year to ensure liquidity in the financial system. In the last three meetings, it has chosen to maintain the status quo on rates.

The RBI Governor said the outlook on growth has turned positive and signs of recovery have strengthened further.

The MPC has projected a GDP growth rate of 10.5 per cent for 2021-22. It has also revised downwards the forecast for retail inflation to 5.2 per cent for the fourth quarter of the fiscal and to 5.2 per cent to five per cent for the first half of the fiscal.