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RBI maintains status quo on key policy rates

Even as the RBI has maintained status quo on key policy rates in today's bimonthly review of its annual monetary policy, it has paved the way for possibility of future hikes in key policy rates. Thus, it kept repo rate unchanged at 4 per cent.

RBI maintains status quo on key policy rates
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RBI maintains status quo on key policy rates

Mumbai, Apr 08 Even as the RBI has maintained status quo on key policy rates in today's bimonthly review of its annual monetary policy, it has paved the way for possibility of future hikes in key policy rates. Thus, it kept repo rate unchanged at 4 per cent.

Addressing on conclusion of three-day monetary policy committee (MPC) meeting which was chaired by him, virtually, the RBI governor, Shaktikanta Das said, "It was unanimously voted by the MPC members to vote in favour of maintaining accommodative stance on key policy rates."

However, the TBI governor this time avoided the sentence as was being used by him in a number of such addresses in the past that 'keep accommodative stance as long as possible.' It simply means that the RBI is bracing for hikes in key policy rates in the days to come.

As part of its liquidity normalisation measures, the RBI has introduced standing deposit facility. It means that whereby they will absorb liquidity at 3.75 per cent interest rates. It will help normalise the liquidity corridor by 50 basis points. The SDF will be 25 basis points below the repo rate and MSF will be above Repo rate by 25 basis points.

The RBI governor said due to the ongoing geo-political situation, the food price pressure likely to be elevated. He maintained that the situation was dynamic and fast changing. He said that macroeconomic outlook was passing through techtonic shift.

Kumud Das
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