The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) has kept Repo Rate unchanged at 4 per cent for the fourth time in a row. The Reverse Repo Rate has also been left unchanged at 3.35 per cent. 

Announcing the decisions of the MPC – the first MPC meeting after presentation of the Union Budget 2021-22 – RBI Governor Shaktikanta Das has said that the central bank will maintain an accommodative monetary policy stance at least through the current financial year and into the next year. This will help support growth, mitigate the impact of COVID-19 pandemic and keep inflation at the targeted level, Mr Das has added.

The RBI has also kept Marginal Standing Facility (MSF) rate and the Bank Rate unchanged at 4.25 per cent. Mr Das has said that the decision to keep the rates unchanged has been taken unanimously. The RBI governor has announced a two-phase restoration of Cash Reserve Ratio (CRR) for banks to 4 per cent. The CRR will be restored to 3.5 per cent from 3 per cent currently effective from March 27, 2021 and to 4 per cent from May 22, 2021. Adding that the outlook on growth has turned positive and signs of recovery in the economy are strengthening further, Mr Das has projected 10.5 per cent GDP growth for 2021-22. “Consumer confidence is reviving, and business expectations of manufacturing, services and infrastructure remain upbeat. The movement of goods and people and domestic trading activities are growing at a robust pace,” he has noted.

On inflation, Mr Das has said that vegetable prices are likely to remain soft in near term. The RBI has revised its Consumer Price Inflation projection for January-March 2021 to 5.2 per cent, while pegging it at 5.2-5 per cent for April-September 2021 and 4.3 per cent for October-December 2021.