RBI Announced Unchanged Repo Rate and Reverse Repo Rate At MSP Meeting

Shakti Kanta Das, the Governor of the Reserve Bank of India (RBI) on the 8th of December, conducted a press conference.

During the press conference, Mr. Das announced the repo rate and the reverse repo rate for loans. After discussing with the six member Monetary Policy Committee (MPC) the RBI Governor kept the repo rate and reverse repo rate, at the same rate.

The repo rate is the rate at which the RBI lends money to commercial banks. Whereas, the reverse repo rate is the rate at which the RBI borrows money from banks.

The repo rate is unchanged at 4 % and the reverse repo at 3.35 %.

The RBI Governor said, “We are better prepared to deal with Covid-19 pandemic now."

The RBI’s announcement will help the banks give loans to investors and private firms who can invest in industries, boosting the economic situation of India.

The Central Bank is actively strategizing monetary policies to limit the economic damage caused by the pandemic and lockdowns along with the upcoming threat of Omicron, the new variant of the Wuhan virus.

Some of the major decision taken during the MPC meeting are:

The MPC voted unanimously 5:1 to maintain an 'accommodative' stance.

The marginal standing facility (MSF) has also been left unchanged at 4.25 percent.

Projection for real GDP growth is maintained at 9.5 percent. The central bank has however revised its Quarter 3 financial year (FY) 2022 GDP growth to 6.6% from earlier 6.8%, and cut Quarter 4 FY ‘22 GDP to 6% from 6.1 %.

Stay tuned for further updates.