The monetary policy committee of the Reserve Bank of India today unanimously decided to keep the repo rate unchanged for the eighth consecutive time. The committee also lowered the FY22 inflation forecast to 5.3 per cent from an earlier estimate of 5.7 per cent. MPC also decided to continue with its accommodative stance as long as necessary to support growth and keep inflation within the target. Amid rising fuel prices, retail inflation stood at 5.3 per cent in August. 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 lower tolerance of 2 per cent.
Since March 2020, RBI has slashed repo rates to a record low of 4 per cent through two rate cuts of 75 bps in March 2020 and 40 bps in May 2020. RBI Governor Shaktikanta Das in Statement on Developmental and Regulatory Policies October 8, 2021, said that “India is in a much better place today than at the time of the last MPC meeting. Growth impulses are strengthening, inflation trajectory is more favourable than expected”.
Consequently, the reverse repo rate under the LAF remains unchanged at 3.35 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 4.25 per cent. The present policy rates are as under.
| CRR (Cash Reserve Ratio) | 4.00% |
| SLR (Statutory Liquidity Ratio) | 18.00 % |
| Repo Rate | 4.00% |
| Reverse Repo Rate | 3.35% |
| MSF Rate (Marginal Standing Facility Rate) | 4.25% |
| Bank Rate | 4.25% |
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