Monday, 18 October 2021

RBI sets 9.5% GDP growth rate for FY22

RBI sets 9.5% GDP growth rate for FY22

The RBI today maintained its GDP rate growth target for this year at 9.5%.

Declaring the policy statement, governor Shaktikanta Das said:

The projection for real GDP growth is retaining at 9.5% for FY 2021-22. These consist of 7.9% in Q2, 6.8% in Q3, and 6.1% in Q4 of 2021-22."

As per data released by the government's statistics office, India's GDP had surged 20.1% in the April-June quarter of FY22.

As widely expected, today's Reserve Bank of India's monetary policy committee kept the repo rate fixed at 4%, while the reverse borrowing rate or a repo rate also stayed at 3.35%. All 60 economists asked by Reuters had said they expected no changes in the reverse or repo rates, which have been stable since May from last year.

The RBI has reduced the repo rate by 115 bps since March 2020 to soften the blow from the coronavirus pandemic and strict containment measures. These follow 135 bps worth of rate cuts since the beginning of 2019.

Das said MPC voted unanimously for keeping the interest rate the same and decided to continue with its accommodative stand as long as necessary to support growth and keep inflation within the target.

RBI sets 9.5 GDP growth rate for FY22 1unsplash image

Read More : Retail inflation of India to 5.30% in August

Indian stock markets extended gains after the policy announcement, with Nifty trading 0.6% higher above 17,900.

"The decision to maintain status quo on key policy rates is significant as it comes at the onset of the festive season."

Shishir Baijal, Chairman & Managing Director, Knight Frank India, said

"We welcome the RBI's move to keep rates unchanged despite the inflationary pressures, as adequate liquidity and stable repo rate will play a catalytic role in the robust recovery of the country's housing sector,"

"At this juncture, we are favorably poising with an encouraging ramp up on vaccination rate across the country, ongoing festive season, and opening up of the country, the time is right to ensure an orbital shift for the industry. Significant and timely measures for a sector like real estate, which has strong linkages with several other sectors, would translate into a considerable push to the country's overall economic growth."

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