RBI MPC Keeps Repo Rate Unchanged At 4 Per Cent, Projects GDP Growth For Q3 At +0.1 Per Cent, Q4 At +0.7 Per Cent 

The Monetary Policy Committee (MPC) of the Reserve Bank of India on Friday voted unanimously to keep repo rate unchanged at 4 per cent. The reverse repo rate stays at 3.35 per cent.

The central bank has projected the GDP growth for Q3 at +0.1 per cent and +0.7 per cent for Q4.

Speaking on GDP growth for the entire year, RBI Governor Shaktikanta Das said, "The real GDP growth for 2021 is projected at minus 7.5 per cent. The recovery in rural demand is expected to strengthen further while urban demand is also gaining momentum,"

Governor Das said, "The MPC decided to continue with accommodative stance of the monetary policy as long as necessary, at least till the current financial year and into next year to revive growth on a durable basis & mitigate the impact of Covid-19 while ensuring that inflation remains within target."

Governor Das also said that inflation is likely to remain elevated with some relief in winter months from prices of vegetables and bumper Kharif arrival.

Governor Das said that CPI inflation is expected to be 6.8% for Q3 adding that it is projected to decrease to 5.8% for Q4.

For H1FY22, Das said the inflation is projected to be in the range of 4.6% to 5.2% with risks staying broadly balanced.

Das said that, "This (inflation) constraints the MPC, at the current juncture, from using the space available to act in support of growth."