New Delhi, Business Desk. Reserve Bank of India Governor Shaktikanta Das on Friday announced the decisions taken by the Monetary Policy Committee (MPC) regarding policy rates. The meeting of the Das-led Monetary Policy Committee began on Wednesday. In this meeting, there was a wide discussion about the current state of the economy, the status of liquidity and other points. Major policy rates like repo rate, reverse repo rate, bank rate and CRR are reviewed and decided at the RBI MPC meeting.
The Monetary Policy Committee met on February 3, 4 and 5. In the meeting, it was unanimously decided to keep the repo rate unchanged at four per cent. With this the reverse repo rate has been retained at 3.35%. Along with this, the monetary stance has been kept ‘liberal’.
MPC (Monetary Policy Committee) voted unanimously to leave policy repo rates unchanged at 4%: RBI Governor Shaktikanta Das pic.twitter.com/PUDdF25OOe
MPC (Monetary Policy Committee) voted unanimously to leave policy repo rates unchanged at 4%: RBI Governor Shaktikanta Das pic.twitter.com/PUDdF25OOe
— ANI (@ANI) February 5, 2021
At the time of the RBI Governor announcing the policy rates, Sensex saw a tremendous boom and it went above the level of 51,000 points. At 10:07 am, Sensex was up 387.59 points, or 0.77%, to a level of 51,001.88.
RBI Governor Shaktikanta Das said that there has been a significant improvement in the growth scenario. He emphasized that there is a need to continue promoting growth at this time. He said that the signs of recovery have improved and the number of sectors where things have become normal.
The RBI governor expressed satisfaction that the inflation rate has come down to a six per cent tolerance level. He declared that retail investors can now open their accounts directly with the RBI for investment and trading in government securities.
He said that CRR will be restored in two phases. In the first phase, a CRR of 3.5 percent will be effective from March 27. In the second phase, from May 22, 2021, CRR of four percent will be applicable. RBI Governor Shaktikanta Das said that in the second quarter, the capacity utilization in the manufacturing sector improved to 63.3 percent compared to the first quarter. The figure stood at 47.3 per cent in the first quarter. There has been an increase in FDI and FPI investment in recent months. This shows the growing confidence in the Indian economy again.
The marginal standing facility rate and bank rate have been kept unchanged at 4.25 percent. Similarly, the reverse repo rate remains unchanged at 3.35 percent. Das said that the GDP growth rate could be 10.5 per cent in FY 2021-22. He also said that in the fourth quarter of the financial year 2020-21, the retail inflation estimate has been revised to 5.2 percent.
He said that the earlier estimate of retail inflation rate of 5.8 percent in the year 2021-22 has been revised to 5.2-5 percent. The RBI governor said that the central bank estimated GDP growth to be between 8.3-26.2 in the first half of FY 2021-22. The RBI has projected GDP growth at 6 percent in the third quarter of FY 2021-22.
