Lagatar24 Desk
New Delhi, Feb 10: The Reserve Bank of India kept the repo rate at 4% for the tenth time in a row on Thursday, maintaining its “accommodative” stance. The reverse repo rate of 3.35 percent has also remained steady.
The decision was made because continuing policy support was needed to support economic growth, according to RBI Governor Shaktikanta Das.
According to the RBI head, GDP (gross domestic product) growth of 9.2% in FY22 (2021-22) will lift the economy above pre-pandemic levels, with 7.8% growth forecast for the next financial year 2022-23.
CPI or retail inflation is expected to be 5.3 percent in FY22 and 4.5 percent in 2022-23, according to the Reserve Bank. When making policy decisions, the RBI primarily considers retail inflation.
A central bank’s repo rate is the rate at which it lends money to banks, while its reverse repo rate is the rate at which it borrows from commercial lenders.
Since May 2020, the RBI has kept the benchmark repo rate at record lows and repeatedly stated that it will continue to support growth and maintain an accommodative posture until the economy has fully recovered.
