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The Monetary Policy Committee of the Reserve Bank of India has decided to maintain status quo on key policy rates.
“The MPC took stock of the evolving macroeconomic and financial conditions and the impact of the second wave of Covid on the economy. Based on its assessment, the MPC voted unanimously to maintain the status quo on repo rates and maintain an accommodative stance for as long as possible to revive growth,” said RBI Governor Shaktikanta Das on Friday after the meeting of the MPC.
Also read: Monetary policy must remain accommodative
The policy repo rate remains unchanged at 4 per cent while the reverse repo rate is at 3.35 per cent.
The move comes amidst expectations of slowing growth after the second surge of the Covid-19 pandemic and local level lockdowns that have impacted economic activity. However, inflationary risks persist.
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Under G-SAP, RBI to purchase ₹1.20 lakh cr worth G-Secs in Q2
Under the programme, RBI commits upfront to a specific amount of open market purchases for an orderly yield curve.The RBI had kept key interest rates unchanged at the last MPC meeting held in April.
The RBI, in its Annual Report 2020-21, had also said that “the conduct of monetary policy in 2021-22 would be guided by evolving macroeconomic conditions, with a bias to remain supportive of growth till it gains traction on a durable basis while ensuring inflation remains within the target.”
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