RBI keeps repo rate unchanged at 4%, maintains accommodative stance
RBI's MPC kept the repo rate unchanged at 4% while the reverse repo rate has been maintained at 3.35%.
In his monetary policy address, RBI Governor Shaktikanta Das said that the central bank will maintain an accommodative stance as long as it is necessary to mitigate the impact of the Covid-19 pandemic. He explained that maintaining the status quo seems desirable at this juncture as the growth and inflation outlook remains uncertain.
Das also highlighted the recent surge in Covid-19 cases in the country, adding that it has resulted in domestic growth uncertainty. He indicated that tightening of restrictions by some state governments could lead to slower economic recovery.
The repo rate is the key interest rate at which RBI lends short-term funds to commercial banks, while the reverse repo is the rate at which RBI borrows from them.