Policy Repo Rate to Remain Unchanged at 4%, Real GDP to Contract by 9.5% in 2021: RBI Governor | Highlights

New Delhi: Reserve Bank of India (RBI) governor Shaktikanta Das on Friday announced the benchmark repurchase (repo) rate has been left unchanged at 4 per cent. Consequently, the reverse repo rate will also continue to earn 3.35 per cent for banks for their deposits kept with RBI. Also Read – RBI’s New Guidelines For Credit, Debit Card Users Are Effective From Today | All You Need to Know

The Central Bank had last revised its policy rate on May 22, in an off-policy cycle to perk up demand by cutting interest rate to a historic low. Also Read – RBI Postpones Monetary Policy Committee Meeting as Posts Lie Vacant

“Monetary Policy Committee (MPC) voted unanimously to keep policy repo rate unchanged at 4%. MPC also decided to continue with the accommodative stance of monetary policy as long as necessary at least through the current financial year & next year”, said Das, while announcing the decisions taken by the central bank’s Monetary Policy Committee (MPC). Also Read – RBI to Retain Lending Rates, Accommodative Stance, Say Experts | Read Here

Furthermore, he asserted, “Reserve Bank of India (RBI) stands ready to undertake further measures as necessary to assure market participants of access to liquidity and easy financial conditions.”

Main highlights from RBI Governor Shaktikanta Das’s media briefing today

Marginal Standing Facility Rate & bank rate remains unchanged at 4.2% and the reverse repo rate stands unchanged at 3.35%: Shaktikanta Das, RBI Governor

RBI to maintain an accommodative monetary policy stance to support growth: Das

Indian economy entering into decisive phase in fight against coronavirus: RBI Governor

Contraction in economic growth of Q1 behind us; silver linings are visible: RBI Governor

Focus must shift from containment to reviving economy: RBI Governor

Inflation likely to ease to projected target by Q4 of FY’21: RBI Governor

GDP growth may break out of contraction and enter positive zone by Q4 of current fiscal: RBI Governor

Modest recovery in 1st half of year could further strengthen in 2nd half; economic activity to gain traction in Q3: RBI Governor

Das said that real GDP to contract by 9.5 per cent in the current fiscal

RBI to maintain comfortable liquidity position; Rs 20,000 crore-OMO auction next week, asserted Governor Das

Experts had earlier opined that the Reserve Bank of India may not go for a reduction in the policy rate in the wake of rising Consume Price Index (CPI) based inflation, driven mainly by supply-side issues.

Industry bodies are also of the view that the RBI should maintain its accommodative stance on the policy interest rates in the wake of serious challenges in limiting contraction in the economy due to the Covid-19 pandemic.