Reserve Bank of India governor Shaktikanta Das on Wednesday announced that the repo rate and the reverse repo rate will remain unchanged. The current repo rate is 4 per cent and the reverse repo rate is 3.35 per cent. The accommodative stance will go on as long as it is needed, "to sustain growth on a durable basis and continue to mitigate the impact of Covid-19 on the economy while ensuring that inflation remains within the target going forward", the governor said. For the fifth time in a row, the policy rates have been kept unchanged.
Economic activities are normalising, rural demands remain buoyant, urban demand has gained traction, the monetary policy committee has noted, Das said.
The committee has also expressed concerns over the fresh surge in the number of Covid-19 infections but hopes the vaccination drive will give a fillip to the growth.
Experts expected "dovish" stance amid the rise in inflation, rise in the number of Covid-19 cases and the imposition of fresh restrictions in some parts of the country. "Given the rise in the spread of coronavirus and the imposition of fresh restrictions to contain the virus spread in the major parts of the country, the RBI is likely to continue with its accommodative monetary policy stance in the upcoming MPC meeting," Brickworks Ratings said in a statement.
The IMF on Tuesday projected an impressive 12.5 per cent growth rate for India in 2021, stronger than that of China. The Washington-based global financial institution, in its annual World Economic Outlook ahead of the annual Spring meeting with the World Bank, said the Indian economy is expected to grow by 6.9 per cent in 2022.