NEW DELHI: The Reserve Bank of India (RBI) kept the repo rate unchanged at 4%, maintaining an accommodative stance. The reverse repo rate stands at 3.35%.
RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) kept its estimate for economic growth unchanged at 10.5 per cent for the current fiscal.
MPC saw inflation edging up to 5.2 per cent in the first half of the new fiscal from 5 per cent in the January-March period and moderate to 4.4 per cent in Q3 of FY22.
In its previous policy announced on February 5, the MPC had kept lending rates unchanged while maintaining the accommodative stance.
The RBI has slashed the repo rate by a total of 115 basis points (bps) since March 2020 to soften the blow from the pandemic. This follows 135 bps worth of rate cuts since the beginning of 2019.
The MPC has cut the repo rate by 250 basis points since February 2019. A status quo on rates and stance was expected by most of the economists and market analysts.
“The MPC judged that monetary policy should remain accommodative till prospects of sustained recovery are well secured,” Governor Shaktikanta Das said.
The decision comes as a resurgence in cases has prompted many state governments to resume coronavirus restrictions this week, fuelling concerns about economic activity. India reported 115,736 new coronavirus infections on Wednesday.
The MPC voted unanimously to keep rates steady and retain the accommodative monetary policy stance, Das said adding that it would do so while keeping a lid on inflation.
The annual retail inflation rate rose to a three-month high of 5.03% in February due to higher fuel prices.
Source/ Courtesy: Deccan Herald