Informist, Friday, Apr 8, 2022

NEW DELHI - The Reserve Bank of India's Monetary Policy Committee today left its policy repo rate unchanged at 4.00% and retained the accommodative policy stance. 

The reverse repo and the Marginal Standing Facility rates were also left unchanged at 3.35% and 4.25%, respectively.

However, the liquidity corridor was restored to pre-pandemic level of 50 basis points by introducing standing deposit facility at 3.75% as the floor of the liquidity adjustment facility.

The decisions to leave repo rate and policy stance unchanged were unanimous, Governor Shaktikanta Das said.

Though the policy stance was retained at accommodative, the committee changed the phrasing of the stance, saying it will "remain accommodative while focusing on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth."

The statement on stance in February had said the committee will "continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward."

"The RBI will engage in a gradual and calibrated withdrawal of this liquidity over a multi-year time frame in a non-disruptive manner beginning this year," Das said announcing the policy decisions today.

Das is scheduled to address the media at 1200 IST.

The committee's decision to leave the policy rate unchanged at its record low is along expected lines. According to an Informist poll, all 26 respondents expected status quo on repo rate. A majority of the respondents also expected reverse repo rate and accommodative stance not to be changed.

The committee raised its projection on inflation and cut GDP forecast sharply. 

The committee scaled up its inflation projection for 2022-23 (Apr-Mar) sharply to 5.7% from 4.5% forecast in February.

GDP growth projection for 2022-23 was cut to 7.2% from 7.8% earlier. 

The minutes of the meeting will be published on Apr 22.

The next meeting of the committee is scheduled during Jun 6-8.  End

Reported by Saji George Titus 

Edited by Ranjana Chauhan

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