- Advertisement -
Citing to the rising fear of COVID-19 Omicron variant in the country, The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) on Tuesday announced to keep the lending repo rate unchanged at 4 percent.
Briefing the media on the development, RBI Governor Shaktikanta Das, said, “To support the economy amid the Covid-19 crisis, RBI has kept a hold on repo rate unchanged at 4 percent and reverse repo rate at 3.35 percent. Indian economy hauled itself out of its deepest contraction. we are better prepared to deal with Covid-19.”
- Advertisement -
The key takeaways from the RBI announcement:
- Advertisement -
- Repo rate to be unchanged at 4 percent.
- The reverse repo rate remains unchanged at 3.35 percent.
- The MPC voted unanimously 5:1 to maintain an ‘accommodative’ stance.
- The marginal standing facility (MSF) has been left unchanged at 4.25 percent.
- The projection for real GDP growth is maintained at 9.5 percent. However, RBI revised its Q3 FY22 GDP growth to 6.6 percent from 6.1 percent.
- RBI decreased Q4 FY22 GDP to 6 percent from 6.1 percent.
- FY22 CPI inflation target has been maintained at 5.3 percent.
- The Q1 FY23 GDP growth forecast has been retained at 17.2 percent, and Q2 FY23 GDP growth at 7.8 percent.
- Proposed return to normal dispensation under MSF Window, as the “RBI remains committed to our ‘accommodative’ stance to broaden growth impulses”.
- RBI plans to re-establish 14-day Variable Reserve Repo Rate (VRRR) as the main liquidity operation.
- The RBI is to absorb Rs 6.5 lakh crore in the VRRR auction on December 17 and absorb Rs 7.5 lakh crore in the VRRR auction on December 31.
- Will allow banks to make a one-time prepayment concerning TLTROs.
- To launch Unified Payments Interface (UPI) based Feature Phone Products.
- UPI caps for gilts, retail, and IPOs are to be enhanced to Rs 5 lakh.
This is the ninth time when RBI has kept the repo rate unchanged.
- Advertisement -
