The Reserve Bank of India"s monetary policy committee (MPC) kept its key lending rate steady at record lows on Wednesday, as expected, with policymakers looking to gauge the impact of the Omicron coronavirus variant on the economic recovery. The committee held the lending rate, or the repo rate (INREPO=ECI), at 4%. The reverse repo rate (INRREP=ECI), or the key borrowing rate, was also maintained at 3.35%. read more All 50 economists polled by Reuters had expected no change in the repo rate and did not expect a change before the second half of 2022. COMMENTARY GARIMA KAPOOR, ECONOMIST - INSTITUTIONAL EQUITIES, ELARA CAPITAL, MUMBAI "Notwithstanding improving economic outlook and emerging concerns on inflation, the MPC held rates steady and retained guidance amid Omicron-related uncertainty and to support broad-based and durable recovery. However, as expected, RBI continued to amble along the liquidity policy normalisation path by hiking VRRR (variable rate reverse repo) quantum, thus laying the groundwork for a likely first reverse repo rate hike early next year." "We expect MPC to hike reverse repo over Feb 2022 and April 2022 and are penciling in the first repo rate hike in August 2022." UPASNA BHARDWAJ, SENIOR ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI "The MPC expectedly maintained status quo on the policy rates and stance. The rhetoric too has remained focused on maintaining durable growth as long as inflation remains well in check." "We continue to expect RBI to fine-tune the surplus liquidity to manage rates and consequently provide guidance on the operating target rate shifting closer to the repo rate. We retain our base case of reverse repo rate hike in February." RUPA REGE NITSURE, GROUP CHIEF ECONOMIST, L&T FINANCIAL HOLDINGS, MUMBAI "It"s a status quo policy in terms of rates, stance and projections. The RBI"s plan to rebalance liquidity by increasing the variable reverse repo quantum will raise short-term rates in a gradual fashion without creating spikes in the long-term cost of borrowing. The policy appropriately reflects the concerns created by the emergence of Omicron and the associated uncertainty." Reporting by Rama Venkat and Chandini Monnappa in Bengaluru; Editing by Devika Syamnath Our Standards: The Thomson Reuters Trust Principles.