INDIA: The RBI’s Monetary Policy Committee (MPC) met on Thursday, February 10, and left the repo rate unchanged at 4% for the tenth time in a row. This eventually results in no change in interest rates. The reverse repo rate has also remained unchanged at 3.35 percent.
Furthermore, the Marginal Standing Facility Rate (MSF) will remain at 4.25 percent. The RBI has chosen to maintain its ‘accommodative’ stance once more.
Five out of six committee members voted in favour of the unchanged rates policy during the three-day meeting, which began on February 8 and ended on February 10. Aside from this meeting, the MPC remained unconcerned about interest rates in a meeting held on December 8.
The last time the RBI changed the repo and other key rates was in May 2020, when the central bank cut rates to a historic low to support the economy during a pandemic crisis.
In reviewing GDP (Gross Domestic Product), the RBI governor stated that GDP growth of 9.2 percent in fiscal year 2021-22 would lift the economy above pre-pandemic levels, with 7.8 percent growth projected for fiscal year 2022-23.
The governor MR. Das quoted that rising global crude oil prices presented an upside risk to inflation. The RBI has pegged retail inflation at 5.3% for the year 2021-22 & 4.5% for the year 2022-23. Moreover, a cap for e-RUPI digital vouchers has been planned to be elevated from ₹10,000 to ₹1 lakh.
Discussing a pandemic effect, Mr. Das stated, “The Covid-19 pandemic held the global economy hostage. However, India has been charting a different course of recovery than the rest of the world and continues to be the fastest-growing economy.”
What is Repo Rate?
Repo rate is a rate at which commercial banks borrow money by selling their securities to the Reserve Bank of India (RBI). It helps RBI to maintain inflation.
What is Reverse Repo Rate?
The reverse repo rate is the rate at which the central bank of India i.e. RBI borrows money from commercial banks in the country. These dealings aid to control the money supply across the country.
What is GDP?
GDP is the total market value of the goods & services produced by a country’s economy. GDP is simply a way of presenting how good or how poorly an economy is doing.
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