The Reserve Bank of India (RBI) on Wednesday maintained status quo for the fifth time in a row on policy rate. RBI Governor Shaktikanta Das-headed rate-setting panel, Monetary Policy Committee (MPC), has left the repo unchanged at 4 per cent. The reverse repo rate stands at 3.35 per cent.
The RBI Governor said that the Central bank will maintain accommodative monetary policy stance to support growth and keep inflation at targeted level. Last month, the government had asked the RBI to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side for another five-year period ending March 2026.
Das said that the recent surge in COVID-19 infections has created uncertainty over economic growth recovery and suggested that focus must be on containing spread of virus and economic recovery.
The central bank retained economic growth for 2021-22 fiscal at 10.5 per cent in 2021-22 fiscal's first monetary policy.
On February 5, after the last MPC meet, the central bank had kept the key interest rate (repo) unchanged citing inflationary concerns.
The RBI has decided that the six-member MPC, which decides on key interest rates, will meet six times during the financial year 2021-22. Half of the committee, which is headed by the RBI Governor, is made up of external independent members.
According to the schedule provided by the RBI, the second meeting of the MPC in the next fiscal will be held on June 2, 3 and 4; third meeting (August 4-6); fourth meeting (October 6-8); fifth meeting (December 6-8) and sixth meeting (February 7-9, 2022). The government moved the interest rate-setting role from the RBI governor to the six-member MPC in 2016. As per the Reserve Bank of India Act, 1934, the central bank is required to organise at least four meetings of the MPC in a year.