RBI Monetary Policy Committee retains accommodative stance, rates

Apr 07 2021 12:08 PM
RBI Monetary Policy Committee retains accommodative stance, rates

The Reserve Bank of India (RBI) today projected the real Gross Domestic Product (GDP) growth for 2021-22 at 10.5 percent.

To support a faster economic recovery amid the surge in Covid-19 cases, the Reserve Bank retained its key short-term lending rates along with the growth-oriented accommodative stance during the first monetary policy review of FY22.

Accordingly, the Monetary Policy Committee (MPC) of the central bank voted to maintain the repo rate, or short-term lending rate, for commercial banks, at 4 percent. Similarly, the reverse repo rate was kept unchanged at 3.35 percent, and the marginal standing facility (MSF) rate and the 'Bank Rate' at 4.25 percent.

Firms engaged in manufacturing, services and infrastructure polled by the RBI in March 2021 were optimistic about a pick-up in demand and expansion in business activity into 2021-22. on the other hand, Consumer confidence has dipped with the recent surge in COVID infections in some states imparting uncertainty to the outlook. Taking these factors into consideration, the projection of real GDP growth for 2021-22 is retained at 10.5 percent consisting of 26.2 percent in Q1, 8.3 percent in Q2, 5.4 percent in Q3 and 6.2 percent in Q4," the Reserve Bank of India has said.

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