The Reserve Bank of India has left the repo rate unchanged at 4 percent, RBI Governor Shaktikanta Das said on Friday. ” The Monetary Policy Committee (MPC) voted unanimously to keep the policy repo rate unchanged at 4 per cent,” Shaktikanta Das said. He further informed that the MPC has decided to continue with accommodative stands of monetary policy as long as necessary, at least till current financial year & into next year to revive growth on a durable basis & mitigate the impact of COVID-19.
“Monetary Policy Committee (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,” Shaktikanta Das said.
Soon after the announcement the Sensex witnessed a hike of 313.55 points and stood at 44,946.20.
On GDP growth projection for 2021, Shaktikanta Das said that the real GDP growth for 2021 is projected at minus 7.5%. He further informed that the recovery in rural demand is expected to strengthen further while urban demand is also gaining momentum.
“The real GDP growth for FY21 is projected at -7.5% vs -9.5% projected earlier and H2 FY21 is expected to show positive GDP growth,” Das said. “We are projecting GDP growth for Q3 at +0.1% and +0.7% for Q4,” he added.
Indian economy that shrank 23.9% in the first quarter of 2020-21 mainly due a nationwide lockdown because of Covid-19 pandemic, saw some improvement in the second quarter as contraction reduced to 7.5%.