New Delhi: The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) on Wednesday unanimously kept key lending rate repo rate unchanged.
Repo is the rate at which RBI lends funds to commercial banks when needed. It is a tool that the central bank uses to control inflation. The reverse repo rate is the rate at which the RBI borrows from banks.
The country's apex bank kept 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 MPC also decided to 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.
RBI Governor Shaktikanta Das said that the projection for real GDP growth is retained at 9.5 per cent in 2021-22 consisting of 6.6 per cent in Q3; and 6.0 per cent in Q4:2021-22. Real GDP growth is projected at 17.2 per cent for Q1:2022-23 and at 7.8 per cent for Q2.
"We are better prepared to deal with Covid-19 pandemic now," he added.
Liquidity conditions remained in large surplus, with daily absorption through the fixed rate reverse repo and the variable Rate Reverse Repo (VRRR) operations under the liquidity adjustment facility (LAF) averaging Rs 8.6 lakh crore in October-November.