New Delhi: The Reserve Bank of India (RBI) on Friday decided to keep benchmark interest rate unchanged at 4 percent but maintained an accommodative stance.
The central bank announcing the outcome of its bi-monthly Monetary Policy rates on October 8 said that it has decided to keep the repo rate unchanged at 4 percent and the reverse repo rate at 3.35 percent. Repo is the rate at which RBI lends funds to commercial banks when needed. It is a tool that the central bank uses to control inflation. The reverse repo rate is the rate at which the RBI borrows from banks.
Key highlights of RBI Governor Shaktikanta Das’s RBI Monetary Policy announcement
– Governor Das says RBI took over 100 measures since onset of COVID-19 pandemic.
– RBI to continue with accommodative stance to revive, sustain growth on durable basis
– Inflation trajectory turning more favourable than anticipated; economic activity slowly picking up.
– RBI retains GDP growth target at 9.5 pc in FY22: Governor Shaktikanta Das.
– Core inflation remains sticky, says RBI Governor.
– Ebbing of virus infection along with vaccination supporting private consumption, says RBI Guv.
– Food inflation expected to remain muted in coming month on back of record production of foodgrains
– Capacity utilisation in manufacturing sector recovered in Q2, further improvements expected in ensuing quarters: RBI Guv.
– Conduct of monetary policy will be guided by domestic circumstance, assessment: RBI Governor.
– IMPS limit to be increased from Rs 2 lakh to Rs 5 lakh: RBI Governor Shaktikanta Das.
The MPC kept the key benchmark rate unchanged in its last seven reviews. This is the eighth time in a row that MPC has decided to keep the policy rate unchanged. RBI had last revised its policy rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting interest rates to a historic low.