The Reserve Bank of India (RBI) has kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 4.0 per cent. Consequently, the reverse repo rate under the LAF remains unchanged at 3.35 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 4.25 per cent.
The monetary policy committee (MPC) of RBI also decided to continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward. These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.
On the economic growth front, real gross domestic product (GDP) growth is now projected at 9.5 percent in 2021-22, consisting of 18.5 percent in Q1; 7.9 percent in Q2; 7.2 percent in Q3; and 6.6 per cent in Q4:2021-22. On the inflation front, CPI inflation is projected at 5.1 percent during 2021-22: 5.2 per cent in Q1; 5.4 percent in Q2; 4.7 per cent in Q3; and 5.3 percent in Q4:2021- 22; with risks broadly balanced.