INSUBCONTINENT EXCLUSIVE:
RBI Governor Shaktikanta Das kept the repo rate the same at 4 per cent in MPC meetContinued financial policy support for economic revival
amidst the COVID-19 pandemic is needed while remaining careful of inflationary pressures, Reserve Bank of India (RBI) Guv Shaktikanta Das
stated in the minutes of the current monetary policy committee (MPC) meeting.RBI Guv underlined the requirement for closely keeping track of
the rate hike circumstance in order to anchor the inflation expectations, according to MPC minutes launched on Friday, August 20
The requirement of the hour is twofold: first, continue the financial policy support to the economy; and second, remain careful of any
resilient inflationary pressures and continual price momentum in essential elements so regarding restore the CPI inflation to four per cent
over a period of time in a non-disruptive way, said RBI Governor Shaktikanta Das.Deputy Governor Dr
Michael Debabrata Patra said that the highest priority now is to restore growth along a sustainable trajectory that becomes suitable with
the inflation target as the COVID-19 pandemic declines
The economy is having a hard time to restore the momentum that had actually gathered in the 2nd half of 2020-21 ..
although it appears significant to compare development with a pre-pandemic year, it requires to be kept in mind that in 2019-20, a cyclical
recession had actually matured over 2 and a half years, removing genuine GDP development to its lowest in the 2011-12 based series of
national accounts, stated Dr Patra
There is significant slack in resource utilisation in the economy which needs to be attracted to get financial activity back to normalcy,
he added.However, MPC member Jayant Varma said that the borrowing rate must be modified
The present reverse repo rate was unsuitable and need to be brought closer to the repo rate to anchor inflation expectations much better,
according to Mr Varma.In its 3rd bi-monthly financial policy review for the fiscal year 2021-22 revealed on August 6, the RBI maintained the
status quo for the seventh time in a row, keeping the key loaning rates steady.The repo rate- the crucial rates of interest at which the RBI
lends cash to business banks was kept stable at 4 percent, and the interest rate or reverse repo rate - the rate at which the RBI borrows
cash from banks, was kept the same at 3.35 percent
The reserve bank kept the gdp (GDP) growth forecast for the existing fiscal at 9.5 percent, nevertheless, offered inflationary issues, it
increased the CPI inflation forecast to 5.7 percent from 5.1 percent
