The Reserve Bank of India today presented the first monetary policy review for the financial year 2021-22. The monetary policy committee of RBI has kept the policy stance ‘liberal’. RBI has projected a growth of 10.5 per cent in GDP in FY 2021-22. Das said that vaccination and its effectiveness are important for global economic recovery. The governor of the central bank said that in the coming time, the price of cereals may be relaxed. The Reserve Bank has kept the repo rate at 4 percent, the reverse repo rate at 3.35 percent, the bank rate at 4.25.
Big things announced by Shaktikanta Das
- Das said that the duration of the TLTRO scheme is being extended for six months (30 September 2021). Shaktikanta Das said that RBI will continue to provide adequate liquidity support in the market through its various tools.
- Shaktikanta Das said that the central bank will buy bonds worth one lakh crore rupees in the first quarter of the current financial year.
- He said that the purchase of government bonds will continue in the financial year 2021-22.
- The central bank will buy bonds worth Rs 25,000 crore on April 15.
- He assured that adequate liquidity would be ensured in the market.
- RBI Governor Shaktikanta Das said that on March 31, 2021, the government has given the central bank a target to again contain inflation between April 2, 2021 to March 2026, between 2-6 percent.
- Shaktikanta Das said that in the year 2020-21, retail inflation was at 5 percent, as against the earlier projected to be at 5.2 percent. The MPC has projected retail inflation at 5.2 per cent in the first and second quarters of FY 2021-22, 4.4 per cent in the third quarter and 5.1 per cent in the fourth quarter.
- The RBI has estimated that the country’s growth rate may remain at 10.5 percent in FY 2021-22. The MPC had made this assumption in its previous policy announcement.
- The central bank has projected the country’s GDP growth to be 22.6 percent in the first quarter of FY 2021-22 and 8.3 percent in the second quarter.
- RBI Governor Shaktikanta Das said that there is a need to closely monitor the recent upsurge in the cases of Covid-19. The policy stance will remain moderate until the impact of the epidemic subsides.
- The meeting of the MPC of the central bank took place at a time when there is a steady increase in the cases of Covid-19 in the country. This has led many states to introduce stringent restrictions such as lockdown at the local level. This has created uncertainty about the economic scenario in the times to come.
- RBI has projected a growth of 10.5 per cent in GDP in FY 2021-22.
- The RBI governor said, “The MPC unanimously decided in favour of keeping the repo rate unchanged at four per cent.”
- He said that as long as there is a need for sustainable growth, he has decided to keep the policy stance liberal.
- The monetary policy committee of RBI has kept the policy stance ‘liberal’. This leaves room for further reduction in interest rates.
The Monetary Policy Committee met on five, six, seven April and reviewed the state of the economy. In the RBI’s latest monetary policy review (February 5, 2021), the economic growth rate for the year 2021-22 was estimated to be 10.5 per cent.