RBI keeps interest rates unchanged for 5th time in a row

The Reserve Bank of India on Wednesday expectedly left interest rates unchanged and maintained an accommodative stance as the economy faces a renewed threat to growth due to the resurgence of coronavirus cases.

The central bank kept the benchmark repurchase rate unchanged at 4 per cent and maintained an accommodative policy stance to support growth.

RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) kept its estimate for economic growth unchanged at 10.5 per cent for the current fiscal.

The MPC saw inflation edging up to 5.2 per cent in the first half of the new fiscal from 5 per cent in the January-March period, and moderate to 4.4 per cent in Q3 of FY22.

The governor said the recent surge in Covid-19 infections has created uncertainty over economic growth recovery, and the focus must be on containing spread of virus and economic recovery.

The central bank will ensure ample liquidity in system so that productive sectors get adequate credit, and ensure orderly conduct of government borrowing; preserve financial stability, Das said.

The RBI will continue to do whatever it takes to preserve stability and to insulate financial firms from global spillovers, he added.