RBI Monetary Policy: Repo rate, accommodative stance unchanged for ninth time

Repo and reverse repo rates are now at 4% and 3.35 percent, respectively.

The Reserve Bank of India's (RBI) six-member monetary policy committee (MPC), led by Governor Shaktikanta Das, voted to keep key interest rates unchanged for the ninth consecutive meeting, maintaining an accommodation posture in the face of the threat posed by the Omicron coronavirus variety. Repo and reverse repo rates are now at 4% and 3.35 percent, respectively. MSF rate and bank rate remain unchanged at 4.25%.

The rate at which the Reserve Bank of India loans short-term cash to banks is known as the repo rate. This is the ninth policy meeting in a row in which the rate-setting panel has kept the benchmark lending rate unchanged.

In a press conference, RBI Governor Shaktikanta Das stated that recent decreases in excise tax and state VAT on petrol and diesel could increase consumer demand by enhancing buying power. He also stated that government consumption has increased since August, which is helping to sustain aggregate demand. Governor Shaktikanta Das claimed that five out of six MPC members opted to maintain the conciliatory approach.

He also stated that the target for real GDP growth in 2021-22 remains at 9.5 percent, with 6.6 percent in Quarter 3 and 6 percent in Quarter 4. Das forecasts real GDP growth of 17.2 percent in the first quarter of 2022-23 and 7.8 percent in the second quarter of 2022-23.