RBI Monetary Policy Review - Growth Focus Stays, Liquidity Normalisation On: ICICI Direct
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ICICI Direct Report
The Reserve Bank of India maintained its repo rate at 4.0%, reverse repo rate at 3.35% and marginal standing facility at 4.25% with Monetary Policy Committee members unanimously voting on status quo on rates. They decided to maintain an ‘accommodative’ stance.
The recovery in domestic economic activity is turning increasingly broad based, with the expanding vaccination coverage, slump in fresh Covid-19 cases and rapid normalisation of mobility.
Rural demand is expected to remain resilient. The spurt in contact-intensive activities and pent-up demand will continue to bolster urban demand.
The government’s infrastructure push, the widening of the performance linked incentive scheme, structural reforms, recovering capacity utilisation and benign liquidity and financial conditions provide conducive conditions for private investment demand.
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