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RBI keeps key interest rates unchanged for 11th time in a row 4/8/2022 10:43:15 PM Reserve Bank of India (RBI) on Friday kept the repo rate unchanged at 4 per cent for the 11th time in a row. The reverse repo rate has also been kept unchanged at 3.35 per cent. This is the first bi-monthly policy for the current financial year 2022-23. RBI said it would restore the width of the liquidity adjustment facility to 50 basis points (bps). RBI Governor Shaktikanta Das said that expected benefits from the ebbing of Omicron wave are offset by an escalation in geopolitical tensions. "Economy is confronted by new and humongous challenges. The situation in Europe (Russian-Ukraine conflict) can derail the global economy," Das added. Reflecting growing uncertainties, RBI raised its retail inflation forecast for the current fiscal year FY23 to 5.7 per cent, 120 basis points (4.5 per cent) above its forecast in February, and cut its economic growth forecast to 7.2 per cent for 2022-23 from 7.8 per cent earlier. Das said RBI will gradually withdraw system liquidity over a multi-year timeframe beginning this year but will do it in a non-disruptive manner, depending on the evolving situation. He further said economic activity is barely above pre-pandemic levels but continues to steadily recover. Repo rate is the rate at which a central bank lends money to banks, and the reverse repo rate is at which it borrows from commercial lenders. RBI has held the key repo rate at record lows since May 2020 and reiterated time and again that it will remain supportive of economic growth. The central bank has been mandated by the government to keep inflation in the range of 2-6 per cent. Retail inflation in February surged to 6.07 per cent, breaching the upper limit of RBI's target range. RBI mainly factors in the retail inflation while arriving at its bi-monthly monetary policy. Meanwhile, the domestic indices traded on a higher note after the Reserve Bank decision.   Share This News with Your Friends on Social Network     Comment on this Story

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