Repo rate unchanged at 4 per cent: RBI
The MPC also decided to remain accommodative while focusing on withdrawal of accommodation to ensure that inflation remains within the target going forward while supporting growth.
Mumbai: The Monetary Policy Committee (MPC) kept the key repo rate unchanged but hiked the reverse repo rate by 40 bps to 3.75 per cent on April 8.
RBI Governor Shaktikanta Das said: "The LAF (liquidity adjustment facility) corridor has now been normalized, at 50 basis points; 25 basis points on either side of policy repo rate which is at 4 per cent. SDF (Standing Deposit Facility) has been instituted and will be the bottom of the corridor."
However, the marginal standing facility (MSF) rate and the Bank Rate ( Reverse Repo Rate) remain unchanged at 4.25 per cent. The standing deposit facility (SDF) rate, which will now be the floor of the LAF corridor, will be at 3.75 per cent.
The MPC also decided to remain accommodative while focusing on withdrawal of accommodation to ensure that inflation remains within the target going forward while supporting growth.
These decisions align to achieve the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent while supporting growth, according RBI note.
"There are 7 things from a monetary policy point of view that we've done. We have upwards revised inflation and growth projections, due to war-induced factors; primary reasons being prices of crude oil going up to $100/barrel, price of wheat, edible oil", added Governor Das.
