<p>Wary of the second Covid wave’s potential impact on economy, the Reserve Bank of India (RBI) on Wednesday said it will do whatever it takes to support the nascent recovery and kept the key interest repo rate unchanged at a record low of 4% to support growth.</p>.<p>Repo rate is the rate at which the central bank lends to other commercial banks.</p>.<p>Governor Shaktikanta Das said the recent surge in infections has, however, imparted greater uncertainty to the outlook and that localised and regional lockdowns could dampen the recent improvement in demand conditions and delay the return of normalcy, but retained the economic growth outlook for financial year 2021-22 at 10.5%.</p>.<p>The RBI, however, revised outlook for prices. It projected retail inflation to be in the 4.4%-5.2% range during the year, with the first half falling in the upper band of over 5%.</p>.<p>"As expected, the RBI has kept policy rates stable and will likely continue holding the rates steady as there are significant risks to inflation moving up. Intermittent supply-side disruptions and gradual demand revival will keep pressure on prices,” said Rumki Majumdar, economist, Deloitte India.</p>.<p><strong>Also Read | <a href="https://www.deccanherald.com/business/business-news/rbi-revises-projected-cpi-inflation-to-52-in-q1-fy22-971393.html">RBI revises projected CPI inflation to 5.2% in Q1 FY22</a></strong></p>.<p>India Inc said RBI’s decision to continue with the accommodative policy stance is reassuring. "While balancing the growth-inflation trade-off to mitigate the impact of the pandemic, the RBI Monetary Policy Committee's decision to continue with the accommodative policy stance 'as long as necessary' is reassuring to the industry and trade," Assocham said in a statement.</p>.<p>Additionally, the RBI also announced a large government bond buying programme to support the fledgling economic recovery.</p>.<p>The interest rate-sensitive bank, auto and realty shares gained after the RBI expectedly left interest rates unchanged and maintained its accommodative stance to boost growth.</p>
<p>Wary of the second Covid wave’s potential impact on economy, the Reserve Bank of India (RBI) on Wednesday said it will do whatever it takes to support the nascent recovery and kept the key interest repo rate unchanged at a record low of 4% to support growth.</p>.<p>Repo rate is the rate at which the central bank lends to other commercial banks.</p>.<p>Governor Shaktikanta Das said the recent surge in infections has, however, imparted greater uncertainty to the outlook and that localised and regional lockdowns could dampen the recent improvement in demand conditions and delay the return of normalcy, but retained the economic growth outlook for financial year 2021-22 at 10.5%.</p>.<p>The RBI, however, revised outlook for prices. It projected retail inflation to be in the 4.4%-5.2% range during the year, with the first half falling in the upper band of over 5%.</p>.<p>"As expected, the RBI has kept policy rates stable and will likely continue holding the rates steady as there are significant risks to inflation moving up. Intermittent supply-side disruptions and gradual demand revival will keep pressure on prices,” said Rumki Majumdar, economist, Deloitte India.</p>.<p><strong>Also Read | <a href="https://www.deccanherald.com/business/business-news/rbi-revises-projected-cpi-inflation-to-52-in-q1-fy22-971393.html">RBI revises projected CPI inflation to 5.2% in Q1 FY22</a></strong></p>.<p>India Inc said RBI’s decision to continue with the accommodative policy stance is reassuring. "While balancing the growth-inflation trade-off to mitigate the impact of the pandemic, the RBI Monetary Policy Committee's decision to continue with the accommodative policy stance 'as long as necessary' is reassuring to the industry and trade," Assocham said in a statement.</p>.<p>Additionally, the RBI also announced a large government bond buying programme to support the fledgling economic recovery.</p>.<p>The interest rate-sensitive bank, auto and realty shares gained after the RBI expectedly left interest rates unchanged and maintained its accommodative stance to boost growth.</p>
