RBI Monetary Policy: Governor Shaktikanta Das quotes Lata Mangeshkar's iconic song 'Aaj Phir Jeene Ki Tamanna Hai'

Reserve Bank of India (RBI) on Thursday kept the benchmark interest rate unchanged at 4 per cent and decided to continue with its accommodative stance in the backdrop of an elevated level of inflation.

While making concluding remarks on RBI Monetary Policy Committee (MPC) announcements, RBI Governor Shaktikanta Das remembered legendary singer Lata Mangeshkar, who passed away recently.

Das said, "We are living in a world of Knightian uncertainty in the absence of determinate knowledge about the next mutation of COVID-19. The ability to forecast the future course of the economy is so contingent on the evolution of the virus that one prognosis is as good or as bad as the other and as ephemeral. If the last two years of living with the virus have taught us anything, it is to remain humble, but grounded in self-belief, never losing confidence and optimism."

“aaj phir jeene ki tamanna hai”

"As the great Lata Mangeshkar – whom we lost recently – sang in her immortal voice: “aaj phir jeene ki tamanna hai”. Together with the spirit behind the next line of this beautiful song, she has conveyed an eternal message of optimism," Das said.

RBI Monetary Policy Feb 2022 Announcements

-This is the tenth time in a row that the Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das has maintained the 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 the interest rate to a historic low.

-This was the first MPC meeting after presentation of Budget 2022-23 in Parliament on February 1.

-MPC has 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 continue to earn 3.35 per cent interest 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.

-RBI retained its growth projection at 9.2 per cent and inflation at 5.3 per cent for the current financial year.

-Retail inflation rose to a five-month high of 5.59 per cent in December from 4.91 per cent in November, mainly due to an uptick in food prices.

-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.

-The bi-monthly policy comes against the backdrop of the Budget wherein a nominal gross GDP of 11.1 per cent has been estimated for 2022-23.