The Reserve Bank of India on Wednesday maintained the status quo and kept the repo rate unchanged at 4 per cent. The reverse repo rate also remains at 3.35 per cent with the central bank maintaining an accommodative stance.
Announcing the decision of the MPC, RBI Governor Shaktikanta Das said the recent surge in COVID-19 cases adds uncertainty to the domestic growth outlook amid tightening of restrictions by some state governments. However, the central bank retained the real GDP growth projection for 2021-22 at 10.5 per cent.
RBI sees both upside and downside pressures for retail inflation trajectory. Logistics costs and international commodity prices are putting pressure on inflation, the RBI governor said, adding that the central bank sees retail inflation at 5 per cent in the fourth quarter of the last financial year and at 5.2 per cent in the current quarter.
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On March 31, 2021, the government retained the inflation target at 4 per cent with the lower and upper tolerance levels of 2 per cent and 6 per cent respectively, for the next five years that is from April 2021 to March 2026, Das added.
Further, the central bank governor announced that a fresh lending of Rs 50,000 crore will be provided to all India financial institutions, adding that RBI will continue to do whatever it takes to maintain financial stability.
In addition, a secondary market GSec acquisition programme has been put in place for FY22. RBI has also extended on-tap targeted long-term repo operations by six months till September.