The meeting of the Monetary Policy Committee of the Reserve Bank of India is over. RBI MPC has not made any change in policy interest rates this time also. The repo rate has been retained at 4 percent. The RBI has revised the retail inflation estimate in the first half of FY 2022 to 5-5.2 per cent. Earlier this estimate was at 4.6-5.2 percent.
New Delhi. The Reserve Bank of India has decided not to change the interest rates in the meeting of the Monetary Policy Committee (RBI MPC). RBI Governor Shaktikanta Das said that the committee has decided to keep the interest rates intact. After this, the repo rate is now 4 percent and the reverse repo rate is 3.35 percent. RBI has also softened its stance on monetary policy. Economists also expected the same. There is also a press conference of the RBI Governor at 12 noon today.
Das said that the signs of recovery in the economy have become stronger. Most of the sectors reached by the epidemic in the state of crisis are now moving rapidly towards the normal level. The number of such sectors has increased. Estimates of economic growth have increased after the vaccine rollout.
It is necessary to support economic development
The RBI has revised the retail inflation estimate in the first half of FY 2022 to 5-5.2 per cent. Earlier this estimate was at 4.6-5.2 percent. The RBI governor said, ‘Inflation has come down to tolerance level of 6 percent. Estimates of economic development have been better than before. MPC believes that it is necessary to support growth in the present time.
Economic growth in 2022 is estimated at 10.5 percent
. For 2022, the economic growth rate has been estimated at 10.5 percent. The retail inflation rate for the fourth quarter of the current financial year has been revised from 5.8 per cent to 5.2 per cent. Das said, “In the second quarter, the entire capacity utilization of the manufacturing sector has improved by 63.3 percent. FDI and foreign institutional investment have also increased in recent months.
Repo rate is 4 percent now
Presently, the repo rate of the Reserve Bank is 4 percent, which is historically low. Earlier this rate was changed on 22 May 2020. This change was made without the MPC meeting due to Corona virus. Since February 2020, the RBI has cut the repo rate by a total of 1.15 percent. Sunil Kumar Sinha, Principal Economist and Director, India Ratings and Research, said that economic growth is more important. Therefore, the repo rate is not expected to be increased.
Inflation rate has come down to 4.59 percent
According to the government data for December 2020, the retail inflation rate has come down to 4.59 percent. The retail inflation rate in November 2020 was 6.93 percent. The RBI determines its main interest rate based on the retail inflation rate. Since inflation has come down, the expectation of a change in the interest rate was low. Currently, the Reserve Bank has adopted a policy of limiting retail inflation to an average of 4 per cent (with a scope of 2 per cent fluctuation) from 5 August 2016 to 31 March 2021.
These are the 6 members of the Monetary Policy Committee. The
committee consists of 6 members, in which three represent the government representatives and three represent the RBI. These include Governor Shaktikanta Das. Among the representatives of the government are Ashima Goyal, Jayant R Verma and Shashank Bhide.
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