Monetary Policy RBI April 2022: In a major development, the Reserve Bank of India (RBI) kept the benchmark interest rate unchanged at 4% on Friday and decided to withdraw its dovish stance to ensure inflation remains in the target level.
This is the 11th consecutive time that the Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das has maintained the status quo. The central bank had last revised its key repo rate or short-term lending rate on May 22, 2020, in an off-policy cycle to stimulate demand by driving the interest rate down to a historic low. .
The MPC, based on its assessment of the macroeconomic situation and outlook, voted unanimously to keep the repurchase (repo) rate unchanged at 4%, Das said when announcing the fortnightly review. monetary policy.
The committee also unanimously decided to remain dovish while focusing on withdrawing its current stance to ensure inflation remains within the target range going forward, he said.
Therefore, the repo rate will continue to earn 3.35% interest to banks for their deposits with the RBI.
Das further said that the marginal standing facility, MSF rate and bank rate remain unchanged at 4.25%.
The RBI cut the growth projection for the current financial year to 7.2% from 7.8% earlier; while raising the inflation forecast to 5.7% from 4.5%.
The MPC was mandated to keep annual inflation at 4% until March 31, 2026, with an upper tolerance of 6% and a lower tolerance of 2%.
The fortnightly policy comes against the background of the budget in which a gross nominal GDP of 11.1% has been estimated for 2022-23.
The government expects this growth to be fueled by a massive capital spending program outlined in the budget to attract private investment by invigorating economic activity and creating demand.
Finance Minister Nirmala Sitharaman has increased capital expenditure (capex) by 35.4% for the financial year 2022-23 to Rs 7.5 lakh crore to continue the recovery of the pandemic-stricken economy thanks to to public investment. The capex for the current fiscal year is set at Rs 5.5 lakh crore.
Spending on the construction of multimodal logistics parks, metro systems, highways and trains is expected to create demand for the private sector, as all projects must be implemented by contractors.
RBI Monetary Policy 2022 April: MPC Meeting Outcome, Highlights, Review Summary – What Governor Shaktikanta Das Announced
WATCH VIDEO: Monetary Policy Statement by Shaktikanta Das, Governor of the Reserve Bank of India
Monetary Policy Statement by Shri Shaktikanta Das, Governor, Reserve Bank of India https://t.co/8w892tXAnX
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(With PTI inputs)