Reserve Bank of India. Pic/PTI.

RBI retains repo rate at 4%, reverse repo at 3.35%

By IANS | Mumbai

Updated: 09 October, 2020 11:36 IST

The Monetary Policy Committee voted to maintain accommodative stance, thus opening up possibilities for more future rate cuts

Persistently high inflation fanned in part due to supply side disruptions along with seasonal factors led the Reserve Bank of India to maintain the key lending rates.

Accordingly, the Monetary Policy Committee (MPC) of the central bank in its penultimate meet for 2020, decided to maintain the repo rate -- or short-term lending -- rate for commercial banks, at 4%.

Besides, the reverse repo rate stands unchanged at 3.35%, and the marginal standing facility (MSF) rate and the 'Bank Rate' at 4.2%.

The MPC voted to maintain accommodative stance, thus opening up possibilities for more future rate cuts.

It was broadly expected that the RBI's MPC might hold rates as recent data showed that retail inflation has been at an elevated level during June.

"The MPC evaluated domestic and global macroeconomic and financial conditions and voted unanimously to leave the policy repo rate unchanged at 4%," RBI Governor Shaktikanta Das said.

"It also decided to continue with the accommodative stance of monetary policy as long as necessary -- at least during the current financial year and into the next year -- to revive growth on a durable basis and mitigate the impact of COVID-19, while ensuring that inflation remains within the target going forward," he added.

According to Das, the country’s economy is entering into a decisive phase in the fight against the pandemic.

He cited that relative to pre-Covid levels, several high frequency indicators are pointing to the easing of contractions in various sectors of the economy and the emergence of impulses of growth.

"By all indications, the deep contractions of Q1:2020-21 are behind us; silver linings are visible in the flattening of the active caseload curve across the country,"he said.

Keep scrolling to read more news

Catch up on all the latest Crime, National, International and Hatke news here. Also download the new mid-day Android and iOS apps to get latest updates.

Mid-Day is now on Telegram. Click here to join our channel (@middayinfomedialtd) and stay updated with the latest news

This story has been sourced from a third party syndicated feed, agencies. Mid-day accepts no responsibility or liability for its dependability, trustworthiness, reliability and data of the text. Mid-day management/mid-day.com reserves the sole right to alter, delete or remove (without notice) the content in its absolute discretion for any reason whatsoever

First Published: 09 October, 2020 11:29 IST

Repo rate slashed by 25BPS, 6.50% from 6.75%

This website uses cookie or similar technologies, to enhance your browsing experience and provide personalised recommendations. By continuing to use our website, you agree to our Privacy Policy and Cookie Policy.