The Reserve Bank of India (RBI) on Friday kept the interest rates unchanged, maintaining an accommodative stance, as it chose to back economic revival over inflation. The central bank maintained the repo rate at 4%.
The Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, has kept the status quo for the seventh time in a row.
RBI had last revised its policy rate on May 22, 2020, during an off-policy cycle to boost demand by slashing interest rates to a historic low.
While announcing the bi-monthly monetary policy review, Das said, "MPC decided to maintain status quo, that is keeping benchmark repurchase (repo) rate at 4 per cent. The reverse repo rate will also continue to earn 3.35 per cent for banks for their deposits kept with RBI."
He added that the MPC voted unanimously for maintaining the interest rates unchanged and decided to continue with its accommodative stance as long as needed in order to support growth and keep inflation within the target.
MPC has been given the mandate to maintain annual inflation at 4 per cent until March 31, 2026, with an upper tolerance of 6 per cent and a lower tolerance of 2 per cent.
Observing that the economy is slowly recovery from brief hiatus, the Governor said, some of the high-frequency indicators reflect recovery.
(Edited by Rupashree Ravi, with PTI inputs)
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