Mumbai, April 8 : Maintaining its accommodative stance the Reserve Bank of India (RBI) kept the benchmark lending rate unchanged at 4 per cent, for the 11th time in a row, here on Friday. The Monetary Policy Committee of the RBI which met on April 6-8 has also decided to keep the reverse repo rate unchanged at 3.35 per cent. “Based on an assessment of the macroeconomic situation and the outlook, the MPC voted unanimously to keep the policy repo rate unchanged at 4 per cent,” RBI Governor Shaktikanta Das said while announcing the bi-monthly monetary policy. He further said that the MPC also decided unanimously to remain accommodative while focusing on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth. Das noted that the marginal standing facility (MSF) and bank rate remain unchanged at 4.25 per cent. The RBI has also decided to restore the width of the liquidity adjustment facility (LAF) corridor to 50 bps, the position that prevailed before the pandemic. The newly instituted Standing Deposit Facility (SDF) will be placed 25 bps below the rep rate at 3.75 per cent, Das said. Explaining the rationale for maintaining the status quo, Das said the expected positive benefits from the ebbing Omicron wave have been offset by the sharp escalation in geopolitical tensions and supply chain disruptions. Das further said that the geopolitical tensions have exacerbated at a time when the global economy was grappling with a sharp rise in inflation and consequent monetary policy normalisation in major advanced economies. He noted that global supply chain disruptions and input cost pressures are now expected to linger even longer. “Inflation is now projected to be higher and growth lower than the assessment in February. Economic activity, although recovering, is barely above its pre-pandemic level. Against this backdrop, the MPC decided to retain the repo rate at 4 per cent,” Das added. PSK ACL1128
