The Reserve Bank of India (RBI) has announced its bi-monthly policy decisions on Friday. RBI has not made any change in the repo rate and has retained it at four per cent.
Apart from this, RBI has also decided to maintain the reverse repo rate at 3.35 per cent. This is the second bi-monthly monetary policy of this financial year and the second after the RBI's budget.
RBI's Monetary Policy Committee meeting began on 6 April. Amid rising inflation in the country, everyone had high hopes for the RBI.
Before this, the Reserve Bank has not made any change in the key interest rates for ten consecutive times.
At present, the repo rate is at 4 per cent and the reverse repo rate at 3.35 per cent. RBI last changed the key interest rates on 22 May 2020. Since then, the interest rate has remained at a historical level of 4 per cent.
RBI Bi-monthly Monetary Policy
GDP growth forecast reduced, inflation increased RBI has raised the inflation forecast. While announcing the monetary policy on Friday, RBI Governor Shaktikanta Das has estimated inflation at 5.7 per cent in the current financial year.
GDP growth forecast reduced, inflation increased RBI has raised the inflation forecast. While announcing the monetary policy on Friday, RBI Governor Shaktikanta Das has estimated inflation at 5.7 per cent in the current financial year.
Apart from this, RBI has reduced the GDP growth rate estimate. Das said that the Russo-Ukraine war will affect the economic recovery.
Das has reduced the GDP growth rate estimate for the current financial year 2022-23 to 7.2 per cent.
Relief to the Indian economy due to large foreign exchange reserves
Das said that the Indian economy is in a state of comfort due to large foreign exchange reserves.
He said that RBI is ready to deal with any adverse situation in the economy. Das said the disruptions in the supply chain have impacted the commodity and financial markets.
Das said global crude oil prices have climbed a lot and remain volatile. He said the pandemic had created a health crisis and had a major impact on people's lives.
Now the tension arising in Europe will affect the recovery of the global economy and recovery will take longer.
What are repo and reverse repo rate
The reverse repo rate is the rate at which the central bank deposits the surplus money of commercial banks with itself. In return, RBI provides interest to these banks.
The reverse repo rate is the rate at which the central bank deposits the surplus money of commercial banks with itself. In return, RBI provides interest to these banks.
This is called the reverse repo rate. At present, the reverse repo rate is 3.35 per cent. At the same time, the repo rate is the rate at which RBI gives loans to commercial banks to meet their immediate needs.
What was the opinion of the industry
Pradeep Multani, president of the industry body PHD Chamber of Commerce and Industries, said on Wednesday that the economy is still in the process of recovery.
In such a situation, there is a need to maintain a liberal stance to strengthen the economic foundation.
"While inflation has risen due to the Russia-Ukraine war, maintaining key interest rates will help the economy tide over external shocks," he said.