New Delhi: Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday kept the benchmark interest (repo) rate unchanged at 4 per cent and maintained its accommodative stance to support economic growth amid the ongoing Covid-19 pandemic. While announcing the policy decision, which was delayed by a day after Lata Mangeshkar's death, Mr Das invoked a song of the legendary singer to convey "an eternal message".
She died on February 6 in Mumbai's Breach Candy Hospital at the age of 92.
"As the great Lata Mangeshkar – whom we lost recently – sang in her immortal voice: 'aaj phir jeene ki tamanna hai'. Together with the spirit behind the next line of this beautiful song, she has conveyed an eternal message of optimism," the RBI Governor said.
Mr Das also said, "We are living in a world of Knightian uncertainty in the absence of determinate knowledge about the next mutation of Covid-19. The ability to forecast the future course of the economy is so contingent on the evolution of the virus that one prognosis is as good or as bad as the other and as ephemeral. If the last two years of living with the virus have taught us anything, it is to remain humble, but grounded in self-belief, never losing confidence and optimism."
In economics, Knightian uncertainty is a lack of any quantifiable knowledge about some possible occurrence, as opposed to quantifiable risk. It is an acknowledgement of imperfect knowledge that makes future events essentially unpredictable. The phenomenon is named after American economist Frank Knight.
Further, RBI has also kept the borrowing (reverse repo) rate unchanged at 3.35 per cent.
This is the tenth time in a row that the Monetary Policy Committee (MPC) headed by Mr Das has maintained the status quo. RBI had last revised its policy repo rate or the short-term lending rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting the interest rate to a historic low.
RBI retained its growth projection at 9.2 per cent and inflation at 5.3 per cent for the current financial year.
The next meeting of the MPC has been scheduled during April 6-8, 2022.