Mumbai The Reserve Bank of India (RBI) on Friday decided to keep benchmark interest rate unchanged at 4 percent but maintained an accommodative stance as the economy is yet to recover from the impact of the second COVID wave.
This is the seventh time in a row that the Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das has maintained the status quo. RBI had last revised its policy rate on 22 May, 2020, in an off-policy cycle to perk up demand by cutting the interest rate to a historic low.
MPC decided to maintain status quo, that is keeping benchmark repurchase (repo) rate at 4 percent, Das said while announcing the bi-monthly monetary policy review.
Address by Shri Shaktikanta Das, Governor, Reserve Bank of India https://t.co/Tg3cZRQoMd
— ReserveBankOfIndia (@RBI) August 6, 2021
Consequently, the reverse repo rate will also continue to earn 3.35 percent for banks for their deposits kept with RBI.
Das said MPC voted unanimously for keeping interest rate unchanged and decided to continue with its accommodative stance as long as necessary to support growth and keep inflation within the target.
MPC has been given the mandate to maintain annual inflation at 4 percent until 31 March, 2026, with an upper tolerance of 6 percent and a lower tolerance of 2 percent.
Observing that the economy is in slow recovery from brief hiatus, the Governor said, some of the high-frequency indicators reflect recovery.
With PTI inputs