RBI Optimistic About 9.5% Growth In FY22; Will Gradually Move To Soften Inflation To 4%: Governor Das

The Reserve Bank of India (RBI), on Friday, determined to maintain the benchmark rate of interest unchanged at 4 per cent, nevertheless, maintained an accommodative stance even because the financial system is exhibiting indicators of restoration after the lethal Coronavirus second wave.

This is the eighth time in a row that the Monetary Policy Committee (MPC) led by Shaktikanta Das, RBI Governor has maintained the established order.

RBI had final revised its coverage repo charge or the short-term lending charge on May 22, 2020, in an off-policy cycle to perk up demand by reducing rate of interest to a historic low.

MPC determined to maintain the benchmark repurchase (repo) charge at 4 per cent, Das stated whereas asserting the bi-monthly financial coverage evaluate.

Consequently, the reverse repo charge may even proceed to earn 3.35 per cent for banks for his or her deposits saved with RBI.

Das stated MPC voted unanimously for protecting the rate of interest unchanged and determined to proceed with its accommodative stance so long as essential to help development and maintain inflation throughout the goal.

Suvodeep Rakshit, Senior Economist, Kotak Institutional Equities, “The RBI policy, as expected, remained cautious and in a wait-and-watch mode. Even as it increased the quantum under the 14-day VRRR auctions and opened the option of 28-day VRRR auctions, it adequately sounded out on its dovishness and the need to ensure liquidity conditions remain comfortable. We do not see the RBI in a hurry to normalize liquidity conditions as well as the reverse repo rate in the near term. We continue to see the February policy as the earliest period of review for the RBI to narrow the policy rate corridor by raising the reverse repo rate.”

Amidst rising gas costs, retail inflation stood at 5.3 per cent in August.

MPC has been given the mandate to keep up annual inflation at 4 per cent till March 31, 2026, with an higher tolerance of 6 per cent and decrease tolerance of two per cent. 

(With company enter) 

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