Reserve Bank of India keeps repo rate unchanged at 4 pc

Mumbai:The Reserve Bank of India (RBI) on Wednesday kept key interest rates

unaltered and maintained an accommodative policy stance to nurture a fragile economic recovery amid new wave of Covid-19 cases.The Reserve Bank of India (RBI) kept the repo rate unchanged at 4 pc.

The reverse repo rate remained unchanged at 3.5 per cent, and marginal standing facility and bank rate kept unchanged at 4.25 per cent.Announcing the bi-monthly policy today the governor said that the RBI will remain accommodative as long as necessary to sustain growth on a durable basis.

RBI had kept the key interest rate (repo) unchanged for the fifth consecutive meeting.On the back of the COVID-19 pandemic, the central bank has cut policy rates to 4 per cent through two rate cuts of 75 bps in March’20 and 40 bps in May’20.

Global economy is showing some recovery but the path remains uncertain, said RBI governor Shaktikanta Das.

RBI said India's GDP Growth is projected at 10..5 pc in the financial year 2021-22 while inflation is seen at 5.2% in the first half of FY22. For Q3 and Q4, CPI inflation is seen at 4.4pc and 5.1 pc respectively, the governor said.

In spite of surge in Covid-19 infections, the economic activity is normalising the governor said adding that urban demand has gained traction and should get fillip from recent vaccination drive.

"Firms engaged in manufacturing, services and infrastructure polled by RBI in March are optimistic about the pick-up in demand and expansion in business activity in FY22," Das added

RBI Governor Shaktikanta Das said that Consumer Price Index (CPI) inflation trajectory is likely to be subject to both upside and downside pressures.Food inflation will depend on progress of the south-west monsoon and taxes on petroleum products, the RBI governor said.

RBI to ensure orderly conduct of government borrowing; preserve financial stability: RBI Governor

Loan limit under priority sector lending to agri sector increased from Rs 50 lakh to Rs 60 lakh

Financial inclusion index based on various parameters to be published in July every year.

Centralised payment systems like NEFT and RGTS to be extended beyond banks to prepaid payments, card networks, white-label ATM companies, etc Cash withdrawal by full-KYC PPIs issued by non-bank users allowed central bank will set up a committee to study working of asset reconstruction companies to fully realise their potential.

The RBI expands RTGS and NEFT facilities to prepaid payment instruments and white lebel ATMs.The RBI extends bank lending to NBFCs for on-lending to PSL till September 30.

The central bank to ensure ample liquidity in system so that productive sector gets adequate credit, says RBI governor Reserve Bank of India will support the market with adequate liquidity. Fresh lending of Rs 50,000 crores will be provided to all India financial institutions, says Shaktikanta Das.

Growth estimate for FY22: 10.05 pc

Real GDP growth forecast for Q1FY22: 22.6 per cent

Real GDP growth forecast for Q2FY22: 8.3 per cent

Real GDP growth forecast for Q3FY22: 5.4 per cent

Real GDP growth forecast for Q4FY22: 6.2 per cent

The RBI increases TLTRO scheme by six more months till September 30.The RBI to ensure liquidity support of Rs 50,000 crore in fresh lending in FY22.The RBI announces Rs 25,000 crore to NABARD, RS 10,000 crore to NHB and Rs 15,000 crore to SIDBI.

The projection for CPI inflation has been revised to 5% in Q4 of 2021, 5.2%, in Q1 of 2021-22, 5.2% also in Q2 of 2021-22, 4.4% in Q3, and 5.1% in Q4 with risks broadly balanced, said Shaktikanta Das.

On March 31, 2021, the government retained the inflation target at 4 per cent with the lower and upper tolerance levels of 2 per cent and 6 per cent, respectively, for the next five years that is from April 2021 to March 2026, says Shaktikanta Das.

The RBI Governor announces Secondary Market G-Sec Acquisition Programme 1.0 to ensure orderly evolution of the yield curve.RBI to buy Rs 25,000 crore of G-Secs on April 15 under G-SAP.RBI to buy Rs 1 lakh crore of G-Secs under G-SAP in Q1.The recent surge in COVID19 cases adds uncertainty to the domestic growth outlook amid tightening of restrictions by some state governments: RBI Governor Shaktikanta Das(UNI)