The Governor of the Reserve Bank of India Shakti Kantadas said after the meeting that the Reserve Bank of India maintained its repo rate and reverse repo rate unchanged at the bimonthly policy review meeting on Wednesday. Das added that India is better prepared to fight the pandemic, and in several sectors, output before the pandemic has exceeded, and there is little demand for external financing. However, due to the emergence of a new Covid variant Omicron in some countries, and other reasons, policy support is needed.
As the central bank decides to maintain its easing stance, the repo rate will remain at 4% and the reverse repo rate will remain at 3.35%. MSF also remains unchanged. A 5:1 majority vote supports RBI’s relaxed position.
“The recovery interrupted by the second wave of pandemics is gaining traction, but it is not strong enough to be self-sustaining and durable. This underscores the importance of continued policy support,” the governor said.
The last time the Reserve Bank of India changed these key lending rates was in May 2020. When the Reserve Bank of India last changed its policy interest rate, India’s GDP fell by 24.4%. Seeing the recovery, the economy grew by 20.1% in the April-June 2021 quarter. In the July-September quarter of 2021, GDP grew by 8.4%, while it contracted by 7.4% in the same period last year. As the central and local governments cut fuel taxes, the inflation rate has been within RBI’s 2-6% target range. However, the damage to food crops caused by heavy rains and rising prices in the telecommunications industry may once again push up inflation.
Consumer prices rose by 4.48% year-on-year in October, up from 4.35% in September. The new Covid-19 strain Omicron, first discovered by South African scientists, is seen as the next potential uncertainty factor in the Indian economy. This variant was first reported from South Africa and has been listed as a variant of concern by the World Health Organization. It spread rapidly in India, and Omicron cases have been reported in Delhi, Maharashtra, Karnataka, Rajasthan, and Gujarat.
News Source : Hindustan Times
