RBI kept the repo rate steady for the ninth consecutive time

The RBI kept the repo rate steady for the ninth consecutive time and maintained the policy stance ‘accommodative’ for as long as necessary to support growth. We are pleased to share our monetary policy analysis and outlook. A few key highlights are appended for your ready refe

rence:

1. Policy measures – Repo rate kept unchanged at 4%.
2. GDP – Real GDP growth projection for FY22 retained at 9.5%.
3. Inflation – Inflation projection for FY22 retained at 5.3%.
4. Stance – To continue with the accommodative stance for as long as deemed necessary to revive and sustain growth on a durable basis and mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward.
5. Other measures
   • RBI to allow banks to make one-time pre-payment with respect to Targeted Long-Term Repo Operations (TLTRO).
   • From January 2022, liquidity absorption will mainly be managed through the auction route.
6. Outlook
   • RBI to remain watchful of the new COVID variant (Omicron), and its repercussions on the global and domestic economies.
   • The central bank may narrow the policy rate corridor through a reverse repo hike depending on evolving conditions.