Reserve Bank of India (RBI) Governor Shaktikanta Das announced the policy decision today, at the end of the scheduled review of the Monetary Policy Committee (MPC) that began on Wednesday, June 2, as it evaluates the economic impact amid the severity of the second wave of COVID-19. The Reserve Bank's monetary policy unanimously voted to maintain the repo rates - the key interest rates at which the RBI lends money to commercial banks - steady at four per cent. The reverse repo rate - the rate at which RBI borrows money from banks, was also unchanged at 3.35 per cent. (Also Read: RBI Keeps Lending Rate At 4%, Projects Real GDP Growth This Year At 9.5% )
The central bank has maintained its status quo on key policy rates for the sixth time in a row, continuing with the accommodative stance as long as necessary to revive economic growth on a durable basis. The RBI targeted retail inflation at 5.1 per cent in the current financial year 2021-22.
The RBI Governor also announced the secondary market government securities acquisition programme - G-SAP 2.0 of Rs 1.2 lakh crore in the second quarter of the current fiscal year. The central bank also cut down the gross domestic product (GDP) growth projection for the current fiscal from 10.5 per cent to 9.5 per cent.
This is the second bi-monthly monetary policy review for the financial year 2021-22, at a time when the economy witnessed a record contraction of 7.3 per cent for the previous fiscal 2021, recording its worst-ever performance in over four decades.
Even as India has recorded around 2.8 crore COVID-19 cases since last year, and over 3 lakh casualties, some analysts believe that the worse may be over as states have begun cautious unlocking, amid initial signs that the peak of the second covid curve may have subsided.
Here are highlights from today's RBI Governor Shaktikanta Das-led Monetary Policy Committee meeting:
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