RBI did not make any change in the repo rate, no immediate relief on EMI. Reserve Bank of India rbi keeps repo rate unchanged
RBI Policy: RBI did not make any change in the repo rate
- Rising inflation became a concern for RBI, raised the inflation rate for this year from 5.1 percent to 5.7 percent
- GDP growth rate is expected to be 9.5 percent in the financial year 2021-22
- Uneven recovery in the economy raises concerns of RBI
New Delhi: The Reserve Bank of India has retained the repo rate at 4 per cent. In such a situation, there is no immediate relief on EMI. RBI Governor Shaktikanta Das announced this while presenting the bi-monthly monetary review policy of the RBI today. With no change in the repo rate, it is clear that the RBI is still maintaining a conservative approach. Through this perspective, the RBI believes that the economy is showing signs of recovery at this time. As such, any change would not be appropriate. Keeping the repo rate at 4 per cent, there has been no change in the reverse repo rate and it remains unchanged at 3.35 per cent. RBI has not changed interest rates for the 7th consecutive time. The repo rate is currently at the lowest level in the last 20 years.
Inflation raises concerns of RBI
In the environment of economic slowdown, rising inflation has increased the concern for RBI. In May, the CPI (Retail Inflation Rate) was much higher than the RBI’s estimate. Inflation had reached 6.30 percent in May. Similarly, it declined slightly to 6.26 per cent in June, as against the RBI’s forecast of 6.0 per cent inflation. That is why while announcing the monetary policy today, RBI Governor Shaktikanta Das has expressed surprise over the high inflation in the month of May.
Due to higher than expected inflation in May and June, the RBI has now increased the inflation forecast for the financial year 2021-22 from 5.1 percent to 5.7 percent. According to him, the inflation rate in the second quarter is 5.9 percent, in the third quarter, 5.3 percent, and in the fourth quarter, it has been estimated to be 5.8 percent.
Confidence on the growth rate
According to RBI, GDP growth is expected to be 9.5 percent in the year 2021-22. which is in line with his earlier estimates. In view of the signs of recovery in the economy, RBI has distanced itself from cutting interest rates. However, the RBI governor has expressed concern over the uneven recovery in the economy. According to him, some sectors are getting revived. At the same time, recovery is not happening as expected in some sectors.
Corona’s threat not averted
Announcing the policy, the RBI governor said that the threat of corona is not over yet. So we need to be cautious. Be careful especially on the third wave. 5 out of 6 members of the committee on today’s monetary review policy voted in favor of not making any change in the repo rate.
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