Lending rate unchanged,RBI cuts FY22 growth forecast to 9.5 pc

The Reserve Bank of India (RBI) kept its key policy rates unchanged and decided to continue with its accommodative stance as long as necessary to support growth and keep inflation within the target. “The Monetary Policy Committee (MPC) voted to maintain status quo ie repo rate remains unchanged at 4%. MCC also decided to continue with accommodative stance as long as necessary to revive and sustain growth on durable basis and to mitigate impact of Covid on economy,” RBI governor Shaktikanta Das said in Mumbai on Friday, after MPC’s three-day meeting.The central bank last revised its policy rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting interest rate to a historic low

"The MPC was of the view that at this juncture policy support from all sides is required to gain the momentum of growth that was evident in the second half of 2021 and to nurture the recovery after it has taken root," Das said. The central bank has also projected real GDP growth of 9.5 per cent for this financial year, which is lower compared to the earlier projection of 10.5 per cent due to the impact of the second COVID wave. RBI has cut the repo rate, its key lending rate, by a total of 115 basis points (bps) since March 2020 to soften the blow from the coronavirus pandemic. MPC, which is the RBI’s rate-setting panel, began its three-day deliberations on the monetary policy on June 1.