RBI Monetary Policy April 2021: No respite to home and auto loan borrowers; RBI keeps interest unchanged at 4%, maintains accommodative stance

This is the second monetary policy announcement after the presentation of the Union Budget 2021-22. The Reserve Bank's rate-setting Monetary Policy Committee (MPC) began its meeting on Sunday when the six-member MPC headed by RBI Governor Shaktikanta Das has started its deliberations.

New Delhi: The EMIs on home and auto loans are unlikely to come down in the near term as the Reserve Bank of India on Wednesday kept the key policy rates unchanged in its bi-monthly Monetary Policy review.

The central bank announcing the outcome of its RBI bi-monthly Monetary Policy rates on April 7 said that it has decided to keep the repo rate unchanged at 4 percent and the reverse repo rate at 3.35 percent. Repo is the rate at which RBI lends funds to commercial banks when needed. It is a tool that the central bank uses to control inflation. The reverse repo rate is the rate at which the RBI borrows from banks.

The RBI monetary policy committee also decided to continue with its accomodative stance. An accommodative stance implies a rate cut in the future if the need arises to support the economy. 

This is the second monetary policy announcement after the presentation of the Union Budget 2021-22. The Reserve Bank's rate-setting Monetary Policy Committee (MPC) began its meeting on Sunday. The six-member MPC headed by RBI Governor Shaktikanta Das has started its deliberations. After the three-day meeting, resolution of the MPC was announced today (April 7).

The MPC kept the key benchmark rate unchanged in its last four reviews. This is the fifth time in a row that MPC has decided to keep the policy rate unchanged. RBI had last revised its policy rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting interest rates to a historic low.