Monetary Policy Committee (MPC) of Reserve Bank of India (RBI) announced its bi-monthly policy statement on December 8, 2021.

Highlights

• In its policy statement, RBI has maintained status quo on key rates for the ninth consecutive time.
• RBI continues to maintain its ‘Accommodative’ stance and the five members of MPC have voted in favour of the same.
• The repo rate has been kept unchanged at 4% as well as reverse repo rate remains the same at 3.35%.
• RBI has also not changed the Marginal Standing Facility (MSF) & Bank Rate, keeping at 4.25%.
• The policy statement is in line with the expectations of Majority of economists as world scare due to the new covid variant Omicron.

Background

RBI has decreased the repo rate by a total of 115 basis points (bps) since March 2020 to overcome the blow of coronavirus pandemic. It is followed by a 135 bps rate cuts since 2019.