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MONETARY POLICY RELEASED BY RBI

MONETARY POLICY RELEASED BY RBI

Context:

Recently, the Reserve Bank of India (RBI) has released the Monetary Policy Report for April 2021.

Following are the Unchanged Policy Rates in the Policy:

  • Bank Rate- 4.25%.
  • Repo Rate - 4%.
  • Reverse Repo Rate - 3.35%.
  • Marginal Standing Facility (MSF) - 4.25%.

What is the GDP Projection?

For 2021-22, Real Gross Domestic Product (GDP) growth has been maintained at 10.5%.

Inflation:

RBI has revised the projection for Consumer Price Index (CPI) inflation to:

  • 5.0% in Quarter 4 of 2020-21.
  • 5.2% in Quarter 1 of 2021-22.
  • 5.2% in Quarter 2 of 2021-22.
  • 4.4% in Quarter 3 of 2021-22.
  • 5.1% in Quarter 4 of 2021-22.

Accommodative Stance:

It means a central bank will cut rates to inject money into the financial system whenever needed.

  • The RBI chose to proceed with the accommodative position as long as important to support development on a tough premise and keep on alleviating the effect of Covid-19 on the economy while guaranteeing that inflation stays within the target going ahead.

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