On Friday, MPC concluded its three-day meeting. In the meeting, RBI Governor said that the MPC has taken a conscious decision to focus on growth and would only intervene in sectors where it sees stress.
The Reserve Bank of India’s six-member monetary policy committee kept the interest rate unchanged amid coronavirus uncertainty. The policy committee was headed by Governor Shaktikanta Das.
The repo rate (lending rate) would continue at 4% and the reverse repo rate (borrowing rate) would be at 3.35%. The repo rate is the same for the sixth consecutive time.
RBI revised the GDP growth projection of FY22 to 9.5%. In Q1 – 18.5%, in Q2 – 7.9%, in Q3 – 7.25 as well as in Q4 – 6.6%.
The revised projection for CPI-based inflation is 5.1%, 5.2% in Q1, 5.4% in Q2, 4.2% in Q3, and 5.3% in Q4. The Governor said that for FY22 the target is within the range of 2-6%.
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The RBI Governor said, “Unlike the first wave of Covid-19, where economy came to a standstill, economic impact during the second wave will be contained.”
RBI Governor stated that the focus would be on the vitals.
He said, “Since the MPC’s April meeting, the second wave of Covid-19 has surged across the several states and spread into smaller towns and villages, leaving a trail of human misery and tragedy in its wake. Yet in these days of trial and travails, it is vital to remain focused on vanquishing the virus.”