RBI Monetary Policy Committee Announcements

Highlights:

Three-membered Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) maintained an accommodative stance and kept the repo rate unchanged at 4 %, in order to revive & sustain growth and reduce the impact of Covid-19 pandemic.
Monetary Policy Committee has also ensured that inflation remains within the target.

Detailed Analysis:

Reverse repo rate was also kept as earlier at 3.35 %.
Marginal Standing Facility (MSF) rate and bank rate also remain unchanged at 4.25 %.
This was the eighth consecutive time that RBI has maintained a status quo on policy rate.
The central bank had last revised its policy rate on May 22, 2020, in an off-policy cycle in order to boost the demand by cutting interest rates.
According to RBI Governor, high-frequency indicators point that economic activity has gained momentum. Core inflation is still sticky.
In July-September, CPI inflation was lower than expected.
Currently, India is in a much better place as compared to the last MPC meeting.
Now, growth impulses are strengthening.
Inflation trajectory is also favourable than it was expected.
For financial year 2021-22, CPI inflation is projected at 5.3 %.
As per RBI, food inflation is predicted to remain muted in upcoming months, as a result of record production of food-grains.