On Wednesday, the Reserve Bank of India (RBI) Governor Shaktikanta Das announced that the six-member Monetary Policy Committee (MPC) had voted unanimously to keep the policy repo rate unchanged at 4 per cent. The rate has remained unchanged for the ninth time running.
The reverse repo rate also remains unchanged at 3.35 per cent, RBI Governor Shaktikanta Das said after the MPC meeting. The MPC has maintained status quo on the Marginal Standing Facility (MSF) rate and the bank rate as well; these rates remain at 4.25 per cent.
Meanwhile, by a majority of five to one, it was decided to retain the accommodative policy stance “to revive and sustain growth on durable basis”.
The projection for real GDP growth is retained at 9.5 per cent in 2021-22, consisting of 6.6 per cent in Q3 and 6 per cent in Q4, RBI Governor Shaktikanta Das said. Real GDP growth is projected at 17.2 per cent for Q1 of 2022-23 and at 7.8 per cent for Q2 of 2022-23, he added.
Speaking on inflation, RBI Governor Shaktikanta Das said, “The persistence of CPI inflation excluding food and fuel since June 2020 is an area of policy concern in view of input cost pressures that could rapidly be transmitted to retail inflation as demand strengthens.”
He added, “Price pressures may persist in the immediate term. Vegetable prices are expected to see a seasonal correction with winter arrivals in view of bright prospects for Rabi crops.”
ON FUEL PRICES
Regarding recent reduction in taxes on petrol and diesel, Shaktikanta Das said, “This should support consumption demand by increasing purchasing power. Government consumption is also picking up from August, providing support to aggregate demand.”
“Crude oil prices softening in November would alleviate domestic cost push build up,” he added.