RBI Monetary Policy Review December Know Inflation GDP Rate Key Here What To Expect Shaktikanta Das

New Delhi: The Reserve Bank of India (RBI) maintained its status quo on key rates in its bi-monthly policy statement announced on Wednesday.  The central bank left the key interest rates unchanged for the ninth consecutive time. MPC kept the policy repo rate unchanged at 4 per cent and maintained accomodative stance.

The six-member Monetary Policy Committee (MPC) headed by governor Shaktikanta Das announced the monetary policy amid economic uncertanities raised by new strain of Omicron variant.

ALSO READ: RBI Policy: Madras HC Asks SpiceJet To Deposit $5 Million In 2 Weeks Or Face Liquidation – Here’s Why

MSF rate and bank rate remain unchanged at 4.25 per cent. Reverse repo rate also kept unchanged at 3.35 per cent.

GDP has expanded by 13.7 per cent in the first half of 2021-22 in alignment with out projection, said Das.  Inflation is also broadly aligned with the target of 4 per cent barring short lived spikes.

Repo rate is the rate at which the RBI lends money to commercial banks; while reverse repo rate is the rate at which the Reserve Bank borrows from banks.

The central bank’s projection for real GDP growth is retained at 9.5 per cent in 2021-22, consisting of 6.6 per cent in Q3, & 6 per cent in Q4. Real GDP growth is projected at 17.2 per cent  for Q1 of 2022-23 and at 7.8 per cent for Q2 of 2022-23. 

“Recent reductions in excise duty & state VAT on petrol and diesel should support consumption demand by increasing purchasing power. Govt consumption is also picking up from August, providing support to aggregate demand,” said Das. 

In the last policy review in October, the central bank had kept the key lending rates unchanged for eight consecutive times and maintaned the monetary stance as ‘accommodative’. An accommodative stance refers to the rate setting panel’s willingness to either cut rates or remain on hold. Repo is the rate at which the central bank lends short-term funds to banks.

Covid-19 new strain Omicron, first identified by South African scientists, once again raises concerns for India’s economy. The World Health Organisation (WHO) has officially named the new variant B.1.1.529.

As per the WHO, the first known confirmed case of the new variant was from a sample collected on 9 November this year. Omicron cases have been spreading fast in India. More than 20 cases have been reported in the last week.