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RBI's MPC retains rates, accommodative stance
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SME Times News Bureau | 08 Oct, 2021
The Reserve Bank of India (RBI) retained its key short-term lending rates during its October monetary policy review of FY22.
The growth-oriented accommodative stance was also retained to give a push to economic activity.
The
Monetary Policy Committee (MPC) of the central bank voted to maintain
the repo rate, or short-term lending rate, for commercial banks, at 4
per cent.
Likewise, the reverse repo rate was kept unchanged at
3.35 per cent, and the marginal standing facility (MSF) rate and the
bank rate at 4.25 per cent.
It was widely expected that MPC would hold rates and the accommodative stance.
The RBI also retained the FY22 projection for real GDP growth at 9.5 per cent.
RBI
Governor Shaktikanta Das pointed out that GDP is expected to grow at
7.9 per cent in Q2, 6.8 per cent in Q3, 6.1 per cent in Q4 and 17.2 per
cent in Q1FY23.
On the inflation front, the RBI lowered FY22
retail inflation projection for the ongoing financial year to 5.3 per
cent from the previous estimate of 5.7 per cent.
Das said that
consumer price inflation softened during July-August, moving back into
the tolerance band with an easing of food inflation.
This is corroborating the Monetary Policy Committee's (MPC) assessment of the spike in inflation in May as transitory, he said.
Furthermore, he expects a further softening can be expected in CPI-based inflation.
"Overall,
the CPI headline momentum is moderating which, combined with favourable
base effects in the coming months, could bring about a substantial
softening in inflation in the near-term," Das said.
He pointed
out that CPI inflation is projected at 5.1 per cent in Q2, 4.5 per cent
in Q3, and 5.8 per cent in Q4 of 2021-22, with risks broadly balanced.
The projection on inflation for Q1 of next fiscal (FY23) is 5.2 per cent.
"We
are watchful of the evolving inflation situation and remain committed
to bring it closer to the target in a gradual and non-disruptive
manner."
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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