Monetary Policy: RBI keeps repo rate unchanged for eighth time in a row

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Reserve Bank of India (RBI) maintained the status quo in its bi-monthly Monetary Policy meeting for the eighth time. The six-member Monetary Policy Committee (MPC) of RBI kept the key lending rate — repo rate unchanged at 4%. The reverse repo rate remained unchanged at 3.5%. The policy stance was kept unchanged at ‘accommodative’.

RBI Governor Shaktikanta Das said the MPC voted to maintain an accommodative stance “as long as necessary to revive and sustain growth and mitigate the impact of COVID19 pandemic while ensuring inflation remains within the target”. The reverse repo rate also remains unchanged at 3.35%.

All six members of the MPC voted to keep rates unchanged, but J.R. Varma, an external member, voted for the second consecutive time to end the accommodative stance.

The Governor said that high-frequency indicators indicated that the economy has gained momentum which will be further aided by the upcoming festive season. Although, he acknowledged sticky inflation, he does believe that we can expect softening retail inflation in the near term

” Growth impulses are strengthening, inflation trajectory more favourable than expected,”, he said in his address today.