RBI keeps policy rate unchanged after six consecutive meetings; cuts growth forecast to 9.5%

MPC decided to maintain the status quo, that is keeping benchmark repurchase (repo) rate at 4%. Consequently, the reverse repo rate will also continue to earn 3.35% interest for banks

Press Trust of India June 04, 2021 11:27:25 IST
RBI keeps policy rate unchanged after six consecutive meetings; cuts growth forecast to 9.5%

Representational image. Reuters

The Reserve Bank of India (RBI) on Friday decided to leave the benchmark interest rate unchanged at 4 percent but maintained an accommodative stance as the economy faces Heat of the second COVID wave.

This is the sixth time in a row that the Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das has maintained status quo. RBI had last revised its policy rate on 22 May, 2020, in an off-policy cycle to perk up demand by cutting the interest rate to a historic low.

MPC decided to maintain the status quo, that is keeping benchmark repurchase (repo) rate at 4 percent, Das said while announcing the bi-monthly monetary policy review on Friday.

Consequently, the reverse repo rate will also continue to earn 3.35 percent for banks for their deposits kept with RBI.

Das said MPC voted unanimously for keeping the interest rate unchanged and decided to continue with its accommodative stance as long as necessary to support growth and keep inflation within the target.

The central bank lowered its estimate for economic growth to 9.5 percent for the current fiscal from earlier projection of 10.5 percent due to the impact of the second COVID wave.

This is the first MPC meeting after official data showed that Indian economy contracted 7.3 percent in the last fiscal, weighed down by nationwide lockdown that pummelled consumption and halted most economic activities.

With regard to inflation, the governor said that retail inflation is likely to be 5.1 percent during the current fiscal.

MPC has been given the mandate to maintain annual inflation at 4 percent until March 31, 2026, with an upper tolerance of 6 percent and a lower tolerance of 2 percent.

Updated Date:

also read

Ramp up Covid vaccination drive for children aged 12-14 years: UP CM to officials
Health

Ramp up Covid vaccination drive for children aged 12-14 years: UP CM to officials

So far, over 2,36,01,148 children in the age group of 15-17 years and over 77,68,203 children in the aged 12-14 have been administered vaccine doses in Uttar Pradesh

64 school students test COVID- 19 positive in Odisha's Raygada
Health

64 school students test COVID- 19 positive in Odisha's Raygada

Forty-four residents of Anwesha Hostel at Kotlaguda were found to be positive for COVID-19

Nirmala Sitharaman flags anonymity as 'inherent risk' in use of blockchain
Business

Nirmala Sitharaman flags anonymity as 'inherent risk' in use of blockchain

The finance minister's remarks come ahead of the launch of the budgetary announcement of CBDC which is based on the blockchain technology and billed as being similar to paper currency