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 percent and the marginal standing facility (MSF) rate and the Bank Rate at 4.25 percent.
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 percent within a band of +/- 2 percent, while supporting growth.
On the economic growth front, projection for real gross domestic product (GDP) growth is retained at 9.5 percent in 2021-22 consisting of 21.4 percent in Q1; 7.3 percent in Q2; 6.3 percent in Q3; and 6.1 percent in Q4 of 2021-22. Real GDP growth for Q1:2022-23 is projected at 17.2 percent. On the inflation front, CPI inflation is now projected at 5.7 percent during 2021-22: 5.9 percent in Q2; 5.3 percent in Q3; and 5.8 percent in Q4 of 2021-22, with risks broadly balanced. CPI inflation for Q1:2022-23 is projected at 5.1 percent.
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