Monetary Policy Announced By RBI Governor Shaktikanta Das | Key Highlights

In line with expectations, this is the ninth consecutive time since the rate remains unchanged; RBI announcement comes amid the threat surrounding Omicron variant

New Delhi: The Reserve Bank of India (RBI) keeps repo rate unchanged at 4 per cent, the reverse repo rate also remains unchanged at 3.35 per cent. The MPC voted unanimously 5:1 to maintain 'accommodative' stance. Further, the marginal standing facility has also been left unchanged at 4.25 per cent

Projection for real GDP growth is maintained at 9.5 per cent.

Retail inflation is projected at 5.3 per cent for FY22.

The central bank has, however, revised its Q3FY22 GDP growth to 6.6 per cent from earlier 6.8 per cent, and cut Q4FY22 GDP to 6 per cent from 6.1 per cent. The RBI has cut Q4FY22 GDP to 6 per cent from 6.1 per cent earlier; and FY22 CPI inflation target has been maintained at 5.3 per cent.

Recent tax cuts on petrol/diesel should support consumer purchasing power.

MPC notes that crude oil prices have eased, that consumption demand has been improving and rural demand is exhibiting resilience. Recovery in the Indian economy is gathering traction. Government consumption has picked up from October 2021. The recent tax cuts on petrol and diesel should help in crowding-in investment in the private sector.

From January 2022, liquidity adjustment will be mainly through the Variable Reverser Repo Auction. CPI inflation to peak in Q4 and soften thereafter. The RBI proposes to return to normal dispensation under Marginal Standing Facility (MSF) Window. The RBI remains committed to accommodative stance to broaden growth impulses.

FY22 CPI inflation target maintained at 5.3 per cent. The October-December CPI inflation target has been revised to 5.1 per cent from 4.5 per cent earlier, while January-March CPI inflation forecast has been revised to 5.7 per cent compared to 5.8 per cent earlier.

Banks do not need prior approval of the RBI for capital infusion in their branches or overseas offices.

Review of prudential norms of investment portfolio. A discussion paper will be placed shortly in RBI site.

RBI will release discussion paper on charges on digital payments in India on its holistic approach.

In order to further deepen UPI system in India, the RBI has proposed three measures and to launch UPI-based payment products for feature phone user.

The central bank would continue to manage liquidity in a manner to maintain financial stability.

The RBI would endeavour to broaden growth impulses, encourage credit flow to productive sectors.

The Indian economy grew 20.1 per cent in the first quarter of the current financial year and 8.4 per cent in the second. With the economy resuming, the output is expected to remain strong in the third quarter. Supply disruptions, higher commodity prices and now concerns caused by the new Covid variant — Omicron — has, however, added uncertainty to the outlook.