The Reserve Bank of India (RBI) on Wednesday kept repo rates unchanged and maintained an accommodative stance to sustain growth.
The policy repo rate or the short-term lending rate was kept at 4 per cent, and the reverse repo rate is 3.35 per cent.
RBI Governor Shaktikanta Das headed six-member MPC was scheduled to meet from April 5 to 7.
This was the first bi-monthly monetary policy review for the new financial year 2021-22, as the country stares at another looming economic crisis, led by the steep rise of active COVID-19 cases. Even as the country has registered more than 8.4 crore COVID-19 vaccine doses cummulatively, as of April 6, yet, partial lockdown in some states and night curfew in the national capital have been announced to prevent the spread of the virus.
RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) kept its estimate for economic growth unchanged at 10.5 per cent for the current fiscal.
MPC saw inflation edging up to 5.2 per cent in the first half of the new fiscal from 5 per cent in the January-March period and moderate to 4.4 per cent in Q3 of FY22.
“Recent surge in COVID-19 infections has created uncertainty over economic growth recovery. Focus must be on containing spread of virus and economic recovery, said Das.
The Central Bank will also ensure ample liquidity in system so that productive sector gets adequate credit along with ensuring orderly conduct of government borrowing and preserve financial stability,.
“RBI will continue to do whatever it takes to preserve stability and to insulate financial firms from global spillovers,” said the RBI governor.
RBI also announced Rs 50,000 cr additional liquidity facility to NABARD, NHB and SIDBI for fresh lending during 2021-22.
Last month, the government had asked the Reserve Bank to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side for another five-year period ending March 2026.
In a bid to control price rise, the government in 2016 had given a mandate to the RBI to keep the retail inflation at 4 per cent with a margin of 2 per cent on either side for a five-year period ending March 31, 2021.
The central bank mainly factors in the retail inflation based on Consumer Price Index while arriving at its monetary policy. On February 5, after the last MPC meet, the central bank had kept the key interest rate (repo) unchanged citing inflationary concerns.