The central bank of India kept the key interest rate unchanged, as the Omicron mutation causes uncertainty in the country’s economic prospects.
The governor of the central bank, Shaktikanta Das, stressed that the monetary policy committee decided to keep the repurchase rate at 4% and the reverse repurchase rate at 3.35%.
Economists expected the repurchase rate to remain unchanged and the reverse repurchase rate to rise this month or next.
Das said the recovery from the pandemic is gaining ground but is not strong enough to be self-sustaining, and the downside risks have increased due to the appearance of Omicron.
He stated that the policy of the central bank will remain facilitative for as long as necessary.
The country’s economy has shown signs of recovery after being hit by the coronavirus and restraint measures at the beginning of the year. The country’s GDP grew by 8.4% during July-September compared to the previous year.
To increase liquidity in the banking system, the central bank bought government securities worth 1.2 trillion. rupees ($ 15.91 billion) between July and September.
Das stressed that the central bank maintained its estimates for growth and inflation for the year until March.
The central bank expects the real economy to grow 9.5% this fiscal year and inflation to 5.3%.
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Source From: Capital
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