RBI keeps repo rate unchanged at 4%, avers Indian economy gaining traction in recovery

The Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday informed that the Monetary Policy Committee (MPC) kept the repo rate unchanged at 4 per cent and the reverse repo rate at 3.35 per cent. The repo rates remained unchanged as to maintain an accommodative stance on part of the central bank. The RBI governor also informed that the Indian economy’s recovery is gaining traction and is in better shape than last MPC meeting. He added that the inflation trajectory was favourable than anticipated.

Announcing the October bi-monthly monetary policy statement, RBI governor said, “Monetary Policy stance remains accommodative as long as necessary to revive and sustain growth and mitigate the impact of the Covid-19 (coronavirus disease) pandemic, while ensuring inflation remains within the target.” He added that, “Reserve Bank of India keeps repo rate unchanged at 4 per cent, maintains accommodative stance; reverse repo rate remains unchanged at 3.35 per cent.”

Furthermore, the governor also informed that the RBI kept the projection for real GDP growth at 9.5 per cent. “The projection for real GDP growth is retained at 9.5per cent for FY 2021-22. This consists of 7.9per cent in Q2, 6.8per cent in Q3 and 6.1per cent in Q4 of 2021-22. Real GDP growth for Q1 of FY 2022-23 is projected at 17.2per cent,” he said. Addressing the press, he further added that the CPI inflation projected for the financial year 2022 is at 5.3per cent while the CPI inflation for Q1 of FY 2022-23 is projected at 5.2per cent.

The RBI governor said that the Indian economy is gaining traction in terms of recovery and was showing positive growth from the recent meeting. “The recovery of Indian economy is gaining traction; it's in better shape than last MPC meeting. Growth impulses strengthening, inflation trajectory favourable than anticipated; hope to sail towards normal times, due to resilience of economic fundamentals of our economy,” Das said.

COVID-19 pandemic 'likely to leave indelible marks on world economy': RBI Governor

Earlier on September 22, was speaking at the 48th Convention of the All India Management Association (AIMA) when he said that the pandemic was the right hour to pause and step back 'and plan for an economy which is stronger, more inclusive and sustainable'. Referring to the boost in productivity as technology gained potential during the shift to work from home arrangement, Das had said, "As a result, consumption pattern is changing and companies are resetting their supply chains both globally as well as locally."

In India too, he said, COVID-19 impacted many dynamic sectors of the economy and propelled them to opt for greater adoption of new digital technologies. He added that the pandemic has created enormous challenges while enhancing the adoption of technologies to improve productivity, growth and income.

Image: ANI