RBI keeps repo rate unchanged at 4% as accommodative to ease COVID impact

New Delhi: The repo rate will remain unchanged with the RBI has deciding to maintain an accommodative stance with the aim of mitigating the economic impact of the COVID pandemic.

Briefing the Monetary Policy Committee decisions, RBI Governor Shaktikanta Das said that the decisions were taken unanimously. Apart from keeping the repo rate at 4 per cent and the reverse repo rate at 3.35 per cent, the RBI also maintained the Marginal Standing Facility and bank rate at 4.25 per cent.

Economic experts are also of the suggestion that keeping the repo rate at 4 per cent would be ideal to stabilize inflation. Meanwhile, the Union government is reported to be introducing another slew of policies for the government securities acquisition programs.

Since the pandemic began to affect the country's economy, the RBI continued to maintain the repo rate at 4 per cent and the latest is the seventh time in a row that the RBI has maintained the key policy rate.

Das has also reminded the possibility of the third COVID wave and its impact on the economy while announcing the MPC decisions.

The Reserve Bank of India's real GDP growth projection of 9.5 per cent for the current fiscal consists of 21.4 per cent in the first quarter, 7.3 per cent in the second quarter, 6.3 per cent in the third quarter and 6.1 per cent in the fourth quarter of 2021-22.

The RBI chief said that the economy is now better placed as compared to June and CPI inflation remained moderate level in May.

Das said that the economic activity has evolved broadly along the expectations of the MPC and monsoon has revived after a brief pause.