RBI records faster growth of economy than expected, ups GDP forecast by 2%

The Fact News Service

December 4

The Reserve Bank of India’s Monetary Policy Committee today left the key lending rate unchanged at 4 per cent as expected, but said it will ensure ample liquidity for stressed sectors to keep a nascent economic recovery on track. The decision comes at a time when the country has entered technical recession amid high levels of inflation as it struggles against the coronavirus pandemic. This marks a third straight policy review with no change in key lending rates, after the RBI brought down the repo rate to 4 per cent — the lowest since 2000 — following an out-of-cycle review in May.

The central bank maintained an “accommodative” policy stance, implying possible rate cuts in future to support the economy, which has been impacted by the coronavirus pandemic. The MPC voted unanimously to keep the interest rates unchanged and continue with its accommodative stance.

As quoted in NDTV, since May, the repo rate — the key interest rate at which the RBI lends money to commercial banks — has been kept steady at a 19-year low of 4 per cent. Currently, the reverse repo rate — the rate at which the RBI borrows from banks — is at 3.35 per cent.

Governor , Mr Das said the economy is rebounding faster than expected from a coronavirus-induced slump earlier in the year, but warned signs of recovery were far from being broad based.

(story sourced through inputs from agencies)