India’s central bank decided to keep its key interest rates unchanged and to continue with its accommodative stance as long as necessary.
At the end of three-day rate setting meeting, the Monetary Policy Committee of the Reserve Bank of India unanimously voted to hold the benchmark policy rate at 4.00 percent. The reverse repo rate was retained at 3.35 percent.
The Marginal Standing Facility rate and the Bank Rate were also left unchanged at 4.25 percent at the meeting.
Also, the committee unanimously decided to continue with accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward.
The central bank forecast the real GDP to grow 9.5 percent in the financial year 2021-22. Consumer price inflation inflation was projected at 5.1 percent during 2021-22.
Governor Shaktikanta Das unveiled additional steps to mitigate the adverse impact of the second wave of the pandemic. He announced a separate liquidity window of INR 150 billion to certain contact-intensive sectors.
Under the scheme, banks can provide fresh lending support to hotels and restaurants, tourism, aviation ancillary services, and other services that include private bus operators, car repair services, rent-a-car service providers, event/conference organizers, spa clinics, and beauty parlours/saloons.