RBI keeps repo rate unchanged at 4 per cent for 8th time in a row

New Delhi, Oct 8: Maintaining status quo for the eighth time in a row, the Reserve Bank of India (RBI) on Friday kept the repo rate unchanged at 4 per cent and the reverse repo rate at 3.35 per cent, thereby maintaining an accommodative stance even as the economy is limping back to normalcy post the pandemic induced lockdown.

"The stance remains accommodative as long as necessary to revive and sustain growth on a durable basis, and continue to mitigate the impact of COVID-19 on the economy," ANI quotes RBI Governor Shaktikanta Das as saying after a meeting of the central bank's Monetary Policy Committee (MPC).

"The worst of the second wave behind us, and substantial pickup in COVID-19 vaccination, giving greater confidence to open up and normalize economic activity," he added.

Earlier, the central bank had cut its policy rates on May 22, 2020, in an off-policy cycle, when India was hit by the first wave of the COVID-19 pandemic. The Reserve Bank had slashed its key lending rate i.e. repo rate by 115 basis points since March 2020 to cushion the economy from the shock of the coronavirus crisis.

The MPC decided to keep the benchmark repurchase (repo) rate at 4 per cent. The reverse repo rate - the rate at which RBI borrows from banks - has also been left untouched at 3.35 per cent.

Amidst rising fuel prices, retail inflation stood at 5.3 per cent in August.

MPC has been given the mandate to maintain annual inflation at 4 per cent until March 31, 2026, with an upper tolerance of 6 per cent and lower tolerance of 2 per cent. PTI