RBI Maintains Status Quo On Key Rate

The Reserve Bank of India governor in its first MPC meet for the FY22 maintained status quo on key policy rate. This is to entrench the economic recovery from the coronavirus led fall-out amid worsening coronavirus situation again. With this repo rate stand unchanged at 4 percent. Repo rate is the rate at which the RBI lends money to banks.

Also, the bank rate and MSF rate are kept unchanged at 4.25%. Further the Governor said the central bank will remain accommodative as long as necessary to sustain growth on a durable basis

GDP growth outlook for FY22 is maintained at 10.5 percent. The MPC had projected this estimate during the previous policy announcement.

Economists are of the view that through the fiscal year 2022, the RBI may keep rates unchanged and may be hike rates towards the end of the ongoing fiscal year or the next.

For the first half of FY22, inflation forecast has been kept at 5.2% while it has been brought down to 4.4% in Q3 and 5.1% in q4.

Over the 5 straight MPC meet held last year, RBI announced a huge 135 bps rate cut.

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