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RBI keeps repo rate unchanged, projects 9.5% GDP growth for FY 22

Updated: Aug 06, 2021 10:54:16am

RBI keeps repo rate unchanged, projects 9.5% GDP growth for FY 22

New Delhi, Aug 6 (KNN) Reserve Bank of India has decided to keep the Policy Repo Rate unchanged at 4%; Marginal Standing Facility (MSF) Rate and Bank Rate at 4.25% and Reverse Repo Rate at 3.35%. 

“Policy Repo Rate will remain unchanged at 4%; Marginal Standing Facility (MSF) Rate and Bank Rate will remain unchanged at 4.25% and also Reverse Repo Rate also will remain unchanged at 3.35%”, governor of the Reserve Bank of India, Shaktikanta Das announced this during his Monetary Policy Address on Friday.

He also mentioned that the Monetary Policy Committee has unanimously voted to leave Policy Repo Rate unchanged (4%) in order to continue with the accommodative stands to revive growth and continue to mitigate the impact of COVID-19 Pandemic. “Today we are in a much better position than at the time of the meeting of the MPC in June 2021,” he added.

The Governor was optimistic about the evolving economic activities in the country with the COVID-19 second wave receding and went on to say that the activities are on the lines of MPC's expectation in June.

“High frequency indicators which are also considered to be the three aspects of growth - Consumption (both Private and Government), Investment and External demand are all on the path of regaining traction,” he added. He also informed, about the Reserve Bank's consumer confidence survey that suggests one year ahead sentiments returning to an optimistic territory.

RBI Governor informed that forecast of the real Gross Domestic Product (GDP) is retained at 9.5% in 2021-22. He explained that the global commodity prices and financial market volatility, together with vulnerability to new waves of infections are downside risks to economic activity.

The Consumer Price Inflation is projected at 5.7% during FY 2021-22, he added.

The Governor informed about the various measures taken by the RBI to mitigate the impact of the COVID-19 Pandemic.

He also informed about RBI’s proposals to conduct two more auctions of Rs 25,000 Crores under G-sec Acquisition Programme (G-SAP 2.0) on 12th August and 26th August 2021. “G-SAP has been successful in anchoring yield expectation while eliciting keen response from market participants,” he added.

During his Monetary Policy address, the Governor announced the additional measures like On-tap TLTRO Scheme: Extension of Deadline: from September 30, 2021 till December 31, 2021, Marginal Standing Facility (MSF): Extension in Period of Relaxation: from September 30, 2021, till December 31, 2021 and Deferral of Deadline for Achievement of Financial Parameters under Resolution Framework 1.0: from March 31, 2022 to October 1, 2022.

He also announced LIBOR Transition-Review of Guidelines – Export Credit in Foreign Currency and Restructuring of Derivative Contracts. “RBI is taking measures in consultation with Banks and market bodies to ensure that the transition away from London Inter Bank Offered Rate LIBOR is orderly and not disruptive” RBI Governor stated.


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