RBI begins policy normalisation; maintains status quo on rates

Retains accommodative stance, FY22 growth forecast; lowers inflation projection

The Reserve Bank of India (RBI) on Friday kept its policy rates and stance unchanged, but decisively moved to withdraw excess liquidity from the system through its least disruptive liquidity management tool.

The six-member monetary policy committee (MPC), headed by RBI Governor Shaktikanta Das, voted unanimously to keep the repo rate at 4 per cent and the reverse repo rate at 3.35 per cent.

The stance would remain ‘accommodative’ for “as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of Covid-19 on the economy”, the central bank said. Five of