RBI Monetary Policy Committee LIVE: The Reserve Bank of India’s bi-monthly Monetary Policy Committee (MPC) voted unanimously to keep repo rates and reverse repo rates unchanged, the Governor of India announced on Thursday. RBI, Shaktikanta Das, after concluding his three-day deliberations today.
RBI said it maintains an accommodative stance and will continue with it as long as necessary for a “broad-based and durable recovery”, citing concerns about inflation and the omicron variant of COVID-19. In terms of forecast, RBI projects GDP to grow 7.8% for FY2022-23, while CPI (Consumer Price Index) inflation is projected at 4.5% for next fiscal year .
Overall, given the outlook for inflation and growth, particularly the comfort provided by an improving inflation outlook, omicron-related uncertainties, and global spillovers, the MPC considered continued support from the MPC to be warranted. policies for a lasting and broad-based policy. recovery,” Governor Das said. The repo rate has remained unchanged at 4%, while the reverse repo rate has remained unchanged at 3.35%.
Some economists had expected MPC members to opt for an increase in the reverse repo rate which currently stands at 3.35%. With many countries beginning policy normalization and even the US Federal Reserve announcing a faster than expected rate hike cycle, all eyes are on the RBI.
The central bank had last revised the benchmark rate on May 22, 2020. Economists and analysts were forecasting an increase in the reverse repo rate between 20 and 40 basis points. However, a change in the monetary policy committee’s dovish stance is unlikely and a change in the repo rate also seems less likely.
We expect the RBI’s overall policy stance to remain notably more dovish than its global peers as India’s output gap is likely to remain negative longer while inflation should trend lower broadly until 2022,” said Rahul Bajoria, Managing Director and Chief India Economist, Barclays.