RBI’s Monetary Policy Committee decides to keep the Repo Rate unchanged at 4%

RBI meeting that ended today, the Reserve Bank of India‘s Monetary Policy Committee opted to keep the repo and reverse repo rates unchanged.

The Reserve Bank of India (RBI) kept policy rates unchanged on Wednesday, despite concerns over the Omicron form of COVID-19 and excessive inflation. The decision was made today by the RBI’s six-member Monetary Policy Committee (MPC), which met from Monday to Wednesday. In October, the MPC held the benchmark policy rates constant as well.

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) declared today that it will preserve the status quo and keep key interest rates unchanged. The repo rate is now at 4%, with the reverse repo rate at 3.35 percent. For the eighth time in a row, the Monetary Policy Committee has held rates steady. Last year, rates were slashed twice, once by 75 basis points in March and then by 40 basis points in May. The RBI lowered rates in response to the issues created by the covid-19 epidemic and subsequent lockdown.

The RBI also kept the forecast for India’s GDP growth for financial year 2021-22 unchanged at 9.5 per cent.

RBI Governor Shaktikanta Das said that the reduction in excise duty and VAT in fuel prices is likely to support demand. RBI MPC has also taken note of the reduction in crude oil prices.

Overall the economic recovery that was interrupted by the second wave of covid has been gaining traction but it is not strong enough to be durable, hence policy support is needed, Shaktikanta Das said.