The Reserve Bank of India’s (RBI) six-member Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, voted unanimously on Friday to keep the repo rate unchanged at 4 percent.
The course remained unchanged for the eleventh time in a row. However, the MPC raised the reverse repo rate by 40 basis points to 3.75 percent, Das said after the MPC meeting.
The RBI rate-setting body also decided to maintain accommodative monetary policy to support economic growth and recovery,
The MPC also decided to leave the Marginal Standing Facility (MSF) unchanged at 4.25%. GDP growth for the current fiscal year is reported at 7.2 percent.
The RBI’s rate-setting body began its three-day meeting on Wednesday to consider firming the next bi-monthly monetary policy.
The MPC held its first meeting in the current financial year. For the past 10 meetings, the MPC left interest rates unchanged and also maintained an accommodative monetary policy stance.
The repo rate, or short-term borrowing rate, was last lowered on May 22, 2020. Since then, the rate has remained at an all-time low of 4 percent.
The government has mandated the central bank to keep inflation at 4 percent, with an upper and lower tolerance limit of 2 percent.
Following the MPC meeting in February, the RBI had decided to keep its key interest rates steady at record lows for the 10th straight meeting to support a sustained recovery in the economy.
https://www.businesstoday.in/latest/economy/story/rbi-keeps-repo-rate-unchanged-at-4-for-11th-time-in-a-row-329121-2022-04-08 RBI leaves repo rate unchanged at 4% for 11th consecutive year