RBI Monetary Policy October 2021 Highlights: Interest rates unchanged; status quo maintained - Check top points from Governor Shaktikanta Das' MPC address

RBI Monetary Policy October 2021:  The Reserve Bank of India (RBI) on Friday decided to keep benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance even as the economy is showing signs of recovery after the second COVID wave. This is the eighth time in a row that the Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das has maintained status quo. RBI had last revised its policy repo rate or the short-term lending rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting interest rate to a historic low.

MPC decided to keep benchmark repurchase (repo) rate at 4 per cent, Das said while announcing the bi-monthly monetary policy review. Consequently, the reverse repo rate will also continue to earn 3.35 per cent for banks for their deposits kept with RBI. Das said MPC voted unanimously for keeping interest rate unchanged and decided to continue with its accommodative stance as long as necessary to support growth and keep inflation within the target. Amid rising fuel prices, the 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 a lower tolerance of 2 per cent.

Here are top points to know from RBI Monetary Policy October 2021:-

- Monetary Policy Committee keeps key interest rate (repo) unchanged at 4 pc for the 8th consecutive time;

-Consequently, reverse repo rate too remains unchanged at 3.35 pc

- Bank rate also remains same at 4.25 pc

-RBI to continue its accommodative stance to sustain growth 

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- To continue with accommodative stance to revive, sustain growth on durable basis: RBI Governor Shaktikanta Das

-Inflation trajectory turning more favourable than anticipated; economic activity slowly picking up: RBI Governor

- Core inflation remains sticky, says RBI Governor

-RBI proposes to introduce framework for retail digital payment in offline mode across India, says Guv Das

-IMPS limit to be increased from Rs 2 lakh to Rs 5 lakh: RBI Governor Shaktikanta Das

-Let there be no concern about adequacy of liquidity; RBI will ensure adequate liquidity to support growth: Guv Das

-Conduct of monetary policy will be guided by domestic circumstance, assessment: RBI Governor

Highlights of RBI monetary policy review August 2021: Following are the highlights of announcements made by RBI Governor Shaktikanta Das after the third bi-monthly monetary policy review by MPC:-

* Monetary Policy Committee keeps key interest rate (repo) unchanged at 4 pc for 7th consecutive time;

* Consequently, reverse repo rate too remains unchanged at 3.35 pc;

* Bank rate also remains same at 4.25 pc;

* RBI to continue its accommodative stance to sustain growth amid COVID;

* Retail inflation (CPI) projection at 5.7 pc during 2021-22; may drop to 5.1 pc in Q1 of next fiscal;

* RBI retains GDP growth projection for 2021-22 at 9.5 pc;

* RBI says some high-frequency indicators looking up again during June-July;

* RBI proposes to conduct two more auctions of Rs 25,000 crore each in August under G-SAP 2.0;

* Repo rate cut by 250 bps since February 2019, reduced bank lending rate by 217 bps;

* RBI says domestic borrowing costs have eased;

* Transmission to lending rates has been stronger for MSMEs, housing and large industries;

* Significant cut in interest rates on personal housing loans and loans to commercial real estate sector augurs well for the economy;

* RBI announces additional measures on liquidity front;

* After onset of COVID pandemic, RBI says it announced over 100 measures to mitigate its impact;

* Next meeting of the MPC scheduled for October 6 to 8.