RBI Monetary Policy: No respite to home, auto loan borrowers; interest rate kept unchanged at 4%

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 Friday kept the key policy rates unchanged in its bi-monthly Monetary Policy review.

The central bank announcing the outcome of its bi-monthly Monetary Policy rates on December 4 said that it has decided to keep the repo rate unchanged at 4 percent and the reverse repo rate at 3.35 percent. The monetary policy committee also decided to continue with its accomodative stance. 

RBI Governor Shaktikanta Das said in an online briefing said that RBI will continue to maintain the accommodative policy stance at least for the current financial year and into the next year to revive growth on a durable basis.

Das added that the financial markets are working in orderly fashion adding that central bank is committed to preserve depositors’ interest in financial system.

He said that there are nascent signs of economic recovery in Q2 of current fiscal. RBI ready to take further measures to ease liquidity; will continue to respond to global uncertainty, he added.

Will use various instruments at appropriate time to ensure ample liquidity is available in system, he said.

The RBI Governor said that core inflation remains sticky. CPI inflation is projected at 6.8 percent in Q3, 5.8 percent in Q4. He added that the economy is recuperating faster with more sectors joining recovery path.

Das added that GDP growth will turn positive in Q3 with 0.1 percent expansion. Q4 will see 0.7 percent growth. FY21 growth will remain at -7.5 percent.