Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday (June 4) announced that the repo rate will remain unchanged at 4% and the reverse repo rate at 3.35%. Monetary Policy Committee (MCC) voted to maintain status-quo meaning the repo rate remains unchanged at 4%.
"MCC also decided to continue with an accommodative stance as long as necessary to revive and sustain growth on a durable basis and to mitigate the impact of COVID-19 on the economy," ANI quoted RBI Governor as saying. Analysts and rating agencies had forecasted the status quo to be maintained with the Reserve Bank of India (RBI) opting out of the heavy lifting.
RBI Governor Shaktikanta Das said that the resilience of Agri, forecast of monsoon, and the gathering momentum of the global economy could act as tailwinds for the domestic economy as the second wave recedes.
"The foremost endeavour of RBI through the pandemic has been to create conducive financial conditions so that financial institutions and market continue to function normally," said RBI Governor Das.
Unlike the first wave when we came to a standstill, the hit to economic activity is expected to be limited in the second wave, said Shaktikanta Das. Urban demand, as reflected in some high-frequency indicators recorded sequential moderation, he added.
Rebound in global trade to support India's exports, said RBI Governor Shaktikanta Das. He added that India's exports have surged during the last few months.
The Reserve Bank of India has cut growth projections for the financial year 2021-22 from 10.5% to 9.5%. The Reserve Bank of India sees inflation in the current fiscal year to be at 5.1%. The central bank expects 5.2% inflation in Q1; 5.4 in Q2; 4.7 in Q3; 5.3 in Q4 with risks broadly balanced.
