RBI Credit Policy: Reserve Bank of India has not made any change in interest rates for the 7th consecutive time. In view of the fear of third wave of Covid-19 epidemic and the threat of increase in retail inflation, interest rates have been kept unchanged.
RBI Credit Policy: Reserve Bank of India has not made any change in interest rates for the 7th consecutive time, that is, your home loan or auto loan EMI is not going to make any difference. In view of the fear of third wave of Kovid-19 epidemic and the threat of increase in retail inflation, interest rates have been kept unchanged. The Reserve Bank has once again retained the repo rate at 4 percent and the reverse repo rate at 3.35 percent. RBI has also maintained its accommodative stance. Bank rate and MSF rate have also not been changed.
No change in interest rates for the 7th time in a row
The last time the Reserve Bank cut interest rates was in May 2020, since then there has been no change in the policy for 7 consecutive times. The Reserve Bank has also not made any changes in the growth estimates, although it has increased the target of CPI inflation for the financial year 2022. The rest of the policy has been as per the market estimates. The policy of the Reserve Bank will not affect the EMI of the home loan.
Be prepared for the third wave of corona
The Reserve Bank Governor said that the threat of Corona is not averted yet. Vaccination is expected to accelerate growth. Shaktikanta Das said that we cannot be careless, we have to be ready for the third wave. He said that the inflation rate has been high in June. RBI has kept the stance accommodative, it has been agreed at 5:1 in the MPC, that is, 5 out of 6 members have approved keeping the stance accommodative. He said that as long as necessary, the conservative stance will be maintained.
Inflation of the past days increased the concern
The RBI governor said that the rising retail inflation rate has surprised us all in May, although the increase in prices has not been much. Demand is improving, but still weak. We have to take necessary steps to maintain the supply-demand balance. The Reserve Bank Governor said that due to the inflation of the past days, the concern has necessarily increased, but it is not going to last for long. RBI has raised the Consumer Price Index (CPI) inflation forecast for the financial year 2022 from 5.1% to 5.7%.
Improvement in supply will reduce inflation
Apart from this, CPI inflation estimate for July-September is 5.9%, CPI inflation estimate for October-December is 5.3%. Shaktikanta Das said that the projection of CPI inflation for the first quarter of FY 2023 is 5.1 percent. He said that with the arrival of Kharif crop and improvement in supply, the inflation rate is expected to come down.
No change in growth goals
The Reserve Bank has retained GDP growth for the fiscal year 2022 at 9.5%. Whereas the target of GDP growth for the financial year 2023 is 17.2%. October-December GDP growth has been 6.3%, the GDP growth estimate for January-March has been kept at 6.1%.
Reserve Bank Governor Shaktikanta Das has announced to extend the On-Tap Targeted Long Term Repo Operations (TLTRO) scheme for another 3 months. He said that the economy has benefited from the reduction in home loan rates.
