RBI MPC Keeps Repo Rate Unchanged At 4%Watchful of evolving situation and remain committed to bring it back to normal in a gradual and non-disruptive manner
- MPC voted unanimously to maintain status quo on policy repo rate
- Decided with a 5-1 majority to maintain accommodative stance
- Stance to remain ‘accommodative’ as long as necessary.
- Recovery of Indian economy is gaining traction
- India in a much better place today on vaccination than last meeting
- Growth impulses seem to be strengthening
- Inflation trajectory turning out to be more favourable than anticipated
- Core inflation however remains sticky
- Evolving situation requires close vigilance
- Aggregate demand seems improving, but slack still remains
- Contact intensive sectors still lagging
- Efforts to contain cost push pressures through a calibrated reversal of fuel taxes could contribute to lowering of inflation
- Projection for real GDP growth retained at 9.5% for FY22Includes 7.98% in Q2, 6.8% in Q3, 6.1% in Q4
- Rural demand is expected to get impetus from continued resilience of agriculture sector, record production of Kharif food grains
- Edible oils, fuel, LPG and medicine prices drive inflation
- Decline in vegetable and cereal prices, sharp deceleration in gold prices and muted home prices help
- Cereal prices expected to remain soft
- Unseasonable rains and adverse weather events are key upside risks to vegetable prices
- CPI inflation projected at 5.3% for FY22; 5.1% in Q2, 4.5% in Q3 and 5.8% in Q4 with risks broadly balanced
- Watchful of evolving situation and remain committed to bring inflation back to normal in a gradual and non-disruptive manner
- G-SAP has been successful in addressing market concerns
- Total liquidity injected into the system was Rs 2.37 lakh crore in the first 6 months of this year against the total of Rs 3.31 lakh crore injected in the full year last year
