RBI keeps repo rate unchanged, maintains accommodative stance 

During the Monetary Policy Committee (MPC) announcements on Friday, Governor Shaktikanta Das stated that the repo rate has been kept unchanged at 4 per cent. Reverse repo rate has also been kept unchanged at 3.5 per cent. The apex bank will, additionally, continue its accommodative stance. 

“Monetary policy stance remains accommodative as long as necessary to revive and sustain growth and mitigate impact of the Covid-19 pandemic, while ensuring inflation remains within target,” the Governor said.  

“Calibrated reversal of indirect taxes on fuel to contain cost-push inflation could contribute to a sustained lowering of inflation, inflationary expectations,” he said while explaining why repo rate has been kept unchanged and stance kept accommodative. 

The decision to keep the repo rate unchanged is in line with what experts had predicted. HDFC Bank's Chief Economist, Abheek Barua had predicted that the apex bank would retain its accommodative stance without any increase in the reverse repo rate. The Federation of Indian Chambers of Commerce & Industry (FICCI), in its latest Economic Outlook Survey, too had stated that the RBI would maintain status quo on the repo rate and continue its accommodative stance in today’s monetary policy.  

“The RBI's approach to continue with the status quo is on expected lines to enable the growth momentum that seems to have set in during the last couple of months. For home buyers, this decision will help reinstate confidence and further access to affordable home loans. The move to reduce interest rates by a few banks recently is encouraging and will pave path for robust housing demand further,” said Ramani Sastri, Chairman & MD, Sterling Developers, on the impact of the unchanged repo rate on the real estate market.

Also read: RBI projects FY22 GDP growth at 9.5%