'As long as necessary to revive growth': RBI keeps interest rates untouched at 4%

Mumbai: The Reserve Bank of India (RBI) on Friday decided to keep benchmark interest rate unchanged at 4 percent but maintained an accommodative stance even as the economy is showing signs of recovery after the second COVID-19 wave. This is the eighth time in a row that the Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das has maintained status quo. RBI had last revised its policy repo rate or the short-term lending rate on 22 May, 2020, in an off-policy cycle to perk up demand by cutting interest rate to a historic low. MPC decided to keep benchmark repurchase (repo) rate at 4 percent, Das said while announcing the bi-monthly monetary policy review. Consequently, the reverse repo rate will also continue to earn 3.35 percent for banks for their deposits kept with RBI. Das said MPC voted unanimously for keeping interest rate unchanged and decided to continue with its accommodative stance as long as necessary to support growth and keep inflation within the target. Amidst rising fuel prices, the retail inflation stood at 5.3 percent in August. MPC has been given the mandate to maintain annual inflation at four percent until 31 March 2026, with an upper tolerance of six percent and a lower tolerance of two percent.