The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Friday Key interest rates kept unchanged and lowered the inflation target for the year 2021-22.
RBI’s latest stand: Interest rates in the banking system are expected to remain stable as the repo rate remains unchanged at 4 per cent, reverse repo rate at 3.35 per cent and marginal standing facility (MSF) rate and bank rate at 4.25 per cent. The MPC decided to continue the accommodative stance for as long as necessary to revive and sustain growth on a sustainable basis and continue to mitigate its impact. COVID-19 on the economy.
RBI Inflation Forecast: RBI has reduced the inflation forecast for 2021-22 to 5.3 per cent from 5.7 per cent earlier. Going forward, the inflation trajectory is set to ease during the third quarter of 2021-22, and several emerging factors provide comfort on the food price front. It said that its pace is expected to slow down in the near future.
Growth Forecast: RBI has retained its forecast for real GDP growth in 2021-22 at 9.5 per cent, which includes 7.9 per cent in the second quarter of the current year. “Despite the sharp loss of momentum due to the second wave, almost all components of GDP registered year-on-year growth. The recovery in aggregate demand picked up pace in August-September,” RBI said.
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