RBI MPC Votes to Keep Key Rates Unchanged, Maintains Accommodative Stance

Business Standard RBI MPC votes to keep key rates unchanged, maintains accommodative stance

Mood of the nation has shifted to confidence & hope, says RBI Governor Shaktikanta Das

The Reserve Bank of India Monetary Policy Committee on Friday voted to keep key rates unchanged and maintained an accommodative stance, announced Governor Shaktikanta Das. With this repo rate stays at 4.0% while reverse repo rate stays at 3.35% The development comes amid signs of recovery in the economy badly battered by the coronavirus pandemic.

"Mood of the nation has shifted to confidence & hope," said Shaktikanta Das adding that the GDP growth may turn positive by Q4FY21. There is an expectation of triple-speed recovery in economic activity, however, real GDP is expected to decline by 9.5%. He said that focus must shift from containment to reviving the economy.

In a Business Standard poll, all the 10 participants, comprising economists and bank treasurers had expected the RBI to pause.

Most observers said the reason for more rate cuts, at least in this calendar year, has ended for the RBI. The MPC can take a view only after seeing the budget math and the fiscal deficit numbers. Any rate cuts now will also not add much of a value, considering the transmission of the past cuts has not happened.

The announcements made by Governor Shaktikanta Das comes over a week after the MPC meeting was postponed due to delay in the appointment of external MPC members.