The repo rate had been kept unchanged at 4 per cent by the Reserve Bank, Governor Shaktikanta Das has said that the policy stance has continued to be accommodative, the announcement was made by the RBI Governor at a press briefing on the end of the bi-monthly Monetary Policy Committee review meeting that had started on Wednesday. Apart from the repo rate, the reverse repo rate had also been left unchanged at 3.35 per cent.
The RBI has now maintained in six consecutive monetary policy meetings, the key benchmark rates unchanged. On May 22, 2020, the central bank had last cut their policy rates when the pandemic affected the whole country.
The key lending rates had been reduced by the Reserve Bank. The state in which the policy rate came was due to the slowdown in manufacturing and service sectors which were a large contributor to India’s gross domestic product.
In July, the India Services Business Activity Index, had posted 45.4, as the third successive month in contraction territory and industrial production was expanding at a slower pace, in May 2020, the growth was 29.3 per cent which is compared to the 135 per cent in April.
In the previous week, IMF had lowered the growth projections from 12.5 per cent to 9.5 per cent for the fiscal year 2021-22 which was down by 3 per cent points which were continued by the second wave of the COVID-19 pandemic in the country.
IMF has revised the economic growth for the next fiscal year of 2022-23 for India, which would be from 6.9 per cent to 8.5 per cent.