Tribune News Service
New Delhi, August 6
Based on an assessment of the evolving domestic and global macroeconomic and financial conditions and the outlook, the Reserve Bank of India (RBI) decided to keep the policy interest rate unchanged at 4 per cent.
Setting out the rationale underlying the decision, RBI Governor Shaktikanta Das said, “The economy is recovering from the setback of the second wave, while the monsoon has revived after a brief hiatus and kharif sowing is gaining momentum. Some high frequency indicators are also looking up again during June-July.”
Sees consumer price inflation at 5.7%
The consumer price-based inflation (CPI) is projected at 5.7 per cent during 2021-22, with 5.9 per cent in Q2; 5.3 per cent in Q3; and 5.8 per cent in Q4 of 2021-22. CPI inflation for Q1 of FY 2022-23 is projected at 5.1 per cent.
“Our expectation is that activity is likely to gather pace with progressive upscaling of vaccinations, continued large policy support, buoyant exports and benign monetary and financial conditions,” Das said, adding, “Today, we are in a much better position than in June.”
“Yet the need of the hour is not to drop our guard and remain vigilant against any possibility of a third wave, especially in the background of rising infections in certain parts of the country,” the RBI Chief cautioned. The Monetary Policy Committee of the RBI has retained its GDP growth projection of 9.5 per cent for 21-22.
Meanwhile, a senior RBI official said the Central Bank may come out with some kind of digital currency model in near future, probably by year-end. Das reiterated that the RBI’s priority would be “to promote growth within the framework of financial stability” and is concerned that any departure from the present pro-growth monetary policy may kill the nascent recovery.
The RBI has also decided to conduct two more auctions of Rs 25,000 crore each this month under the G-sec Acquisition Programme (GSAP).