RBI keeps key rates unchanged in its bi-monthly monetary policy

Reserve Bank of India (RBI) on Friday, June 4, 2021, kept the benchmark interest rates unchanged amid COVID-19 uncertainty and fears over inflation. RBI's MPC began its bi-monthly monetary policy deliberations on Wednesday, June 2, 2021.

While making the policy statement, RBI Governor Shaktikanta Das said that the projected Gross Domestic Product growth rate will be 9.5 per cent for the current fiscal year.

RBI has kept the repo rate unchanged at 4.25 per cent, the sixth time in a row. The RBI reverse repo rate or RBI's borrowing rate also remains unchanged at 3.35 per cent. RBI has also maintained an accommodative monetary policy stance to support growth and kept inflation at the targeted level, he said.

Governor Shaktikanta Das said that India's forex reserves may have exceeded 600 billion US dollars and to extend a special liquidity facility of Rs 16,000 crore to SIDBI for lending and refinancing. He further said that a separate liquidity window of Rs 15,000 crore to be opened till 31st of March for intensive sectors. It will help banks to provide support to hotels and restaurants and other services under this programme.

About inflation, he said, the GDP growth forecast for FY 22 has been cut from 10.5 per cent earlier to 9.5 per cent. The recent fall in inflation provides elbow room and policy support from all sides required to regain growth momentum.