pension rate unchanged; Commercial banks will not declare dividends for fiscal year 21



> Repo rate unchanged at 4%; status quo maintained for third consecutive policy

> MPC maintains an accommodating position at least during the current fiscal year and next year

> All MPC members voted unanimously for a status quo and an accommodating position

On inflation

> Projection of CPI inflation at 6.8% for Q3 FY21 and 5.8% for Q4 FY21

> CPI inflation of 5.2% to 4.6% in the first half of FY22, with broadly balanced risks

Alert: RBI projected CPI inflation at 6.8% for T2FY21, 5.4-4.5% in 2H FY21, 4.3% in Q1 FY22 in October policy

> MPC believes inflation should stay high unless there is transient relief during the winter months

> Monetary policy constrained in the current economic situation to use the space available to act in favor of growth

> Further efforts are needed to ease inflationary pressures on the supply side

On growth

> Real GDP growth projection for FY21 revised to -7.5% against -9.5% earlier

> GDP growth observed at 0.1% in Q3 FY21 and 0.7% in Q4 FY21

> GDP growth of 6.5% to 21.9% in the first half of FY22, with broadly balanced risks

> Signs of recovery far from generalized; depends on sustained political support

> The upturn in rural demand is expected to strengthen further

> The recovery in urban demand is also accelerating

> Positive impulses clouded by a possible increase in infections in parts of the country

> Private investment remains low and capacity utilization has not fully recovered

> The outlook is brightening with the advancement of vaccines

About Ruben V. Albin

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