‘For durable recovery’: RBI’s MPC retains rates, accommodative stance

The Reserve Bank of India (RBI) on Thursday retained its key short-term lending rates during the sixth and final monetary policy review of FY22.

The growth-oriented accommodative stance was also retained to give a push to economic activity.

The Monetary Policy Committee (MPC) of the central bank maintained the repo rate, or short-term lending rate, for commercial banks, at 4 per cent.

Likewise, the reverse repo rate was kept unchanged at 3.35 per cent, and the marginal standing facility (MSF) rate and the ‘Bank Rate’ at 4.25 per cent.

It was widely expected that the MPC would hold rates and the accommodative stance.

In his policy statement post the Monetary Policy Committee’s bi-monthly meeting, RBI Governor Shaktikanta Das said: “The MPC flagged the potential downside risks to economic activity from the highly contagious Omicron variant.”

“The MPC also noted that consumer price inflation has edged higher since its last meeting, but largely along anticipated lines.”

According to Das, the MPC was of the view that continued policy support is warranted for a durable and broad-based recovery.

“Overall, taking into consideration the outlook for inflation and growth, in particular the comfort provided by the improving inflation outlook, the uncertainties related to Omicron and global spillovers, the MPC was of the view that continued policy support is warranted for a durable and broad-based recovery,” he said.

The status quo in policy rates was welcomed by the investors.

The S&P BSE Sensex and NSE Nifty50 rose just after the announcement.

At 1.30 p.m., Sensex traded at 58,976.66 points, up 0.87 per cent or 510.69 points from its previous close

The Nifty traded at 17,615.65 points, up 0.87 per cent or 151.85 points from the previous close.

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