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Reserve Bank keeps repo rate unchanged at 4.25 %

Mr. Das said the MPC was of the view that inflation is likely to remain elevated with some relief in the winter months from the prices of perishables and bumper kharif arrival.

RBI: Maintaining an accommodative stance, the RBI Governor Shaktikanta Das today said that the Monetary Policy Committee has unanimously decided to leave the policy repo rate unchanged at 4 per cent. He said the marginal standing facility remains unchanged at 4.25 per cent and reverse repo rate stands unchanged at 3.35 per cent.

Mr. Das said the MPC was of the view that inflation is likely to remain elevated with some relief in the winter months from the prices of perishables and bumper kharif arrival.

The RBI Governor said the signs of recovery are far from being broad based and are dependent on sustained policy support. He said, the real GDP growth is projected at minus 7.5 percent in 2020-21. Shaktikanta Das stated that recovery in rural demand is expected to strengthen further, while urban demand is also gaining momentum. He said business sentiment of manufacturing firms is gradually improving. He pointed out that private investment is still slack and capacity utilisation has not fully recovered.

management strategy

He said a small window is available for pro- active supply to break the inflation spiral being fuelled by supply chain disruptions.

Mr. Das said further efforts are necessary to mitigate supply side driven inflation pressures.

He added that RBI is strongly committed to preserve the stability of the financial sector and will do whatever is necessary on this front.

Stating that economic contractions have started to ease, he said, portfolio flows into emerging markets have recovered and hard currency bond issuances have strengthened for those with stronger credit ratings.

Mr. Das said throughout the Covid-19 pandemic period RBI acted pre-emptively to face the challenged head-on posed by the virus and fallout of the pandemic on the Indian economy.

RBI he said remains strongly committed to preserve the stability of the financial sector and will do whatever is needed on this front. He ensured that RBI will use various instruments at the appropriate time while ensuring ample liquidity is available to the system.

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