RBI Keeps Interest Unchanged at 4%

RBI Monetary Policy December 2021

On Wednesday, the Reserve bank of India in its bi-monthly policy review meeting kept the repo rate and reverse repo rate unchanged. 

Knowing about the repo rate, it is a rate at which the Reserve Bank of India (RBI) lends funds to commercial banks when needed. It is a toll that the Central Bank used to control inflation. The reverse repo rate is a rate at which RBI borrows from banks.

As per the information, the home and auto loan borrowers will have to continue with their current EMIs that are unlikely to come down in the near term as the reserve banks of India unchanged its rate at 4 percent and the reverse repo rate at 3.35 percent. The MSG also remains unchanged. There was a 5:1 majority to retain RBI's accommodative stance.

According to the statement, the Governor, Said, "the recovery that had been interrupted by the second wave of the pandemic is gaining traction but is not yet strong enough to be self-sustaining and durable. This undergoes the vital importance of continued policy support."

The last time RBI changed these key lending and borrowing rates in May 2020.  The six-member MOC voted unanimously for keeping the interest rate unchanged and decided to continue with its accommodative stance as long as necessary to support growth and keep inflation within target.