RBI keeps repo rate unchanged at 4 pc, maintains accommodative stance
The Reserve Bank of India (RBI) on Friday kept the repo rate unchanged at 4 per cent and maintained the policy stance at accommodative.
The RBI's Monetary Policy Committee (MPC) made a unanimous decision to maintain status-quo after a three-day meeting that began on December 2.
The reverse repo rate also remains steady at 3.35 per cent, RBI Governor Shaktikanta Das said. He added that the MPC will maintain the accommodative stance "for as long as necessary."
It was broadly expected that the RBI's MPC will hold rates as recent data showed that retail inflation has been at an elevated level during October.
However, RBI Governor Shaktikanta Das, in his address pointed out that the Apex bank expects inflation to decelerate.
Das said the MPC was of the view that inflation is likely to remain elevated with some relief in the winter months from prices of perishables and bumper kharif arrivals.
According to Das, India`s economy is expected to witness a Real GDP growth of (-) 7.5 per cent in FY21.
He pointed out that the economy has witnessed a faster than anticipated recovery, citing that several high frequency indicators have pointed to growth in both rural and urban areas.--IANS
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. Reverse repo rate is the rate at which the RBI borrows from banks.
While there are some signs of a pick up in economic activity due to the staggered easing of a lockdown, there is a large degree of uncertainty amid a surge in coronavirus cases.
(With agency inputs)
