The Reserve Bank of India's six-member monetary policy committee, headed by Governor Shaktikanta Das, decided to maintain key interest rates for a ninth straight meeting, retaining an accommodative stance amid the threat surrounding Omicron coronavirus variant.
Repo and reverse repo rates currently stand at 4 per cent and 3.35 per cent, respectively.
The RBI will continue to manage liquidity that is conducive to entrenching the recovery, fostering macro-economic and financial stability, Das reaffirmed. The Reserve Bank has stuck to its liquidity playbook by saying that it will continue to use variable rate reverse repo operations to absorb funds.
The Indian economy grew 20.1% in the first quarter of the current financial year and 8.4% in the second. With the economy reopening and high-contact services resuming, the output is expected to remain strong in the third quarter. Supply disruptions, higher commodity prices and now concerns caused by the new Covid-19 variant Omicron has, however, added uncertainty to the outlook.
Taking all these factors into consideration, projection for real GDP growth is retained at 9.5% in FY22. Real GDP growth is estimated at 6.6% in Q3 FY22, 6% in Q4 FY22, 17.2% for Q1 FY23 and 7.8% for Q2 FY23.
CPI inflation is now projected at 5.3% during FY22. It is seen at 5.1% in Q3, and 5.7% in Q4 of FY22, with risks broadly balanced. It is then expected to ease to 5% and remain there for the first two quarters of the next financial year.