RBI Cuts GDP Growth Forecast for FY22 to 9.5%; Repo Rate Unchanged

The retail inflation has been projected at 5.1 percent for FY22 by the RBI, Governor Shaktikanta Das said.

RBI Governor Shaktikanta Das on GDP growth, inflation, interest rates. 

(Photo: Altered by The Quint)

The Reserve Bank of India (RBI) has cut the economic growth forecast for the current fiscal (FY22) from 10.5 percent to 9.5 percent, Governor Shaktikanta Das announced at a briefing on Friday, 4 June.

The retail inflation has been projected at 5.1 percent for FY22 by the central bank.

The interest rates have also been left unchanged. "The Monetary Policy Committee (MCC) voted to maintain status quo, that is, repo rate remains unchanged at 4 percent. MCC also decided to continue with accommodative stance as long as necessary to revive and sustain growth on a durable basis and to mitigate impact of COVID-19 on the economy... Marginal Standing Facility (MSF) rate and bank rates remain unchanged at 4.25 percent. The reverse repo rate also remains unchanged at 3.35 percent," Das was quoted as saying.

The RBI Governor also stated that the MCC has decided to continue with a accommodative stance as long as it’s necessary to revive and sustain growth on a durable basis, so as to mitigate the impact of COVID-19 on the economy.

As per the national bank, India's forex reserves may have exceeded USD 600 billion.

Announcing the coming round of G-Sec purchases, the Governor informed that the RBI will purchase Rs 40,000 crore worth of government securities on 17 June, and Rs 1.20 lakh crore of G-Sec will be bought in the second quarter.

A normal monsoon will provide a tailwind for economic revival, he further said in his address, coming in the backdrop of a devastating second wave of the COVID-19 pandemic that has led to lockdown-like restrictions across states.

With the decline in daily cases over the last couple of days, states have begun reopening gradually.

(With inputs from PTI and ANI.)