In a move widely anticipated, India’s central banks kept its interest rates at the same level on Wednesday.

The Reserve Bank of India’s monetary policy committee voted to keep the repo rate — the rate at which the central bank lends to commercial lenders — unchanged at 4%. They agreed to keep the RBI’s accommodative stance at 4% for as long it took to support India’s growth and revive its momentum.

The RBI’s reverse repo rate, or the rate at which commercial banks lend to the central bank, remained unchanged at 3.35%.

The central bank stated that “The domestic recovery has been gaining momentum, but it is only about keeping up with pre-pandemic levels. It will need to be nurtured diligently by supportive policy settings until it takes root” said in its policy statement.

The statement stated that private consumption is still below levels pre-pandemic, but there could be a drop in demand for services that are contact-heavy if India does not take preemptive measures to limit the effects of the new variant of the omicron Covid.

It Indian rupeeFollowing the decision of the monetary policy panel, it moved slightly. At 4:19 pm HK/SIN it had changed to 75.50 Indian rupees for one dollar

Aditi Nair, chief economist, credit ratings agency ICRA (Indian affiliate of Moody’s), stated, “The overall tone of today’s message and forward guidance are less hawkish that what we had expected.”

In a note, she stated that “With the MPC noting that ongoing domestic recovery requires sustained policy support in order to make it more wide-based,” and that there is a lower probability that our base case assessment will change to neutral for the policy review in February 2022.

India’s retail inflation increased to 4.488% in October from 4.35% one month prior. according to government data.

The escalating vegetable price inflation According to the Indian central banking, heavy rains in November and October are likely to lead to a reverse trend when winter comes. The Indian central bank said that proactive government intervention was possible. It also prevented higher crude oil prices being added to domestic retail inflation.

“Crude Prices have seen a significant correction in recent period. “Core inflation is still being impacted by high prices for industrial raw materials, transport costs and global logistics bottlenecks,” said the RBI.

For the March-2022 fiscal year, the central bank anticipates that retail inflation will be at 5.3% and 5% respectively for the April-June next year. Medium-term inflation targets for the RBI are 4% within a range of 2% to 6.

The central bank kept its growth projection for the current fiscal year unchanged at 9.5% — based on the assumption that India avoids a resurgence in Covid cases. The RBI projects India’s GDP to increase by 17.2% in the April-June quarter of next year.

India reported 8.4% year-on-year growthFrom July to September in accordance with the expectations