Correct Answer : 7.8%
The RBI kept the repo rate — the rate at which the RBI lends to banks — unchanged for the tenth time in a row at 4%. All six members of the MPC, headed by RBI Governor Shaktikanta Das, voted to keep the repo rate intact while one member, Jayanth Varma, dissented against retaining the accommodative policy stance. The RBI decision indicates that lending and deposit rates are expected to remain unchanged in the banking system.
What surprised most economists and market participants was the central bank retaining the reverse repo rate at 3.35%. The reverse repo rate is the rate at which RBI borrows from banks. A hike in this rate would have meant that the central bank wanted to absorb more money, or liquidity, from the banking system and would have signalled the start of the reversal of the monetary policy cycle that would eventually lead to a rise in rates.
Behind the RBI decision not to hike rates is also its outlook on inflation for the next financial year. Despite crude oil prices rising over
$90 per barrel, it has projected a lower retail inflation level of
4.5% in the next fiscal
2022-23 as against the inflation forecast of
5.3% for
2021-22.
The RBI has projected real (adjusted for inflation) gross domestic product (GDP) growth projection at
7.8% for
2022-23. The real GDP growth at
9.2% for 2021-22 takes it modestly above the level of GDP in 2019-20, the policy panel said. But the projection is marginally below the lower limit of the band of
8% - 8.5% in the Economic Survey of 2021-22 and well below the IMF’s forecast of
9%.
Source : Indian Express
