RBI retains FY22 GDP growth target at 9.5%; Repo rate remains at 4% while reverse repo rate at 3.35%
Reserve Bank of India
The Monetary Policy Committee (MPC) of the Reserve Bank of India has maintained a status quo on interest rates for the eighth consecutive time and retained the monetary stance as accommodative. While announcing the Monetary Policy in Mumbai today, RBI Governor Shaktikanta Das said, it has been unanimously decided to keep the lending rates unchanged.
Repo rate remains unchanged at four per cent while reverse repo rate is maintained at 3.35 per cent. Repo rate is the rate at which the Central Bank lends short-term money to banks.
Mr Das said, policy stance will stay accommodative as long as necessary to revive and sustain growth and mitigate the impact of the COVID-19 pandemic while ensuring inflation remains within the target.
The RBI has also maintained the FY22 GDP growth target at 9.5 per cent. The Governor said, the Central Bank sees Q2 FY22 GDP growth at 7.9 per cent compared to 7.3 per cent earlier. He added that growth impulses were strengthening and the inflation trajectory may be shifting downwards in contrast to initial expectations.
Besides, the RBI has increased the transaction limit on Immediate Payment Service (IMPS) of the National Payments Corporation of India (NPCI) to Rs 5 lakh from Rs 2 lakh. IMPS provides round-the-clock instant domestic funds transfer facility and is accessible through various channels like internet banking, mobile banking apps, bank branches, ATMs, SMS and IVRS. The transaction limit of Rs 2 lakh was capped in January 2014 for the channels and for SMS and IVRS the limit is Rs 5,000.
The RBI has decided to halt the Government Securities Acquisition Programme (G-SAP). While unveiling the bi-monthly monetary policy review on October 8, 2021, RBI Governor Shaktikanta Das said the liquidity overhang and absence of fresh government borrowing suggest that bond purchases are not required at the moment. He said G-SAP has been successful and anchoring yield expectations, coupled with other liquidity measures.