MUMBAI: The Reserve Bank of India's monetary policy committee kept interest rates steady at record lows on Friday but traders were awaiting its commentary about liquidity normalisation for clues on its next policy move.
The RBI held the repo rate, its key lending rate, at 4% and kept the reverse repo rate, the borrowing rate, unchanged at 3.35%.
RBI has slashed the repo rate by a total of 115 basis points (bps) since March 2020 to soften the blow from the health crisis and tough containment measures. This follows 135 bps worth of rate cuts since the beginning of 2019.
Here are the key points from RBI governor's speech:
* RBI retains GDP growth target at 9.5% in FY22: RBI governor Shaktikanta Das
* Economy recovering from setback of second wave of Covid-19; economic activity to pick up on vaccination: RBI governor
* Action aimed at prioritising growth and addressing distress in economy: Das
* CPI inflation seen at 5.7% in 2020-21, to fall to 5.1% in April-June (Q1) 2022-23: RBI governor
* We are in midst of extraordinary situation arising out of pandemic, require policy support from all sides to nurture recovery: RBI
* According to RBI, headline CPI inflation plateaued at 6.3 per cent in June after having risen by 207 basis points (bps) in May 2021. Food inflation increased in June primarily due to an uptick in inflation in edible oils, pulses, eggs, milk and prepared meals and a pick-up in vegetable prices.
* Fuel inflation moved into double digits during May and June as inflation in LPG, kerosene, and firewood and chips surged.
* The Reserve Bank said it will undertake a secondary market government securities acquisition programme or G-SAP 2.0 worth Rs 50,000 crore in two tranches this month to enable an orderly evolution of the yield curve.
(With inputs from agencies)
