New Delhi: The Reserve Bank of India on Friday left the benchmark interest rate unchanged at 4 per cent for a fourth time, but decided to maintain an accommodative stance, indicating more rate cuts in the future in order to support the economy hit by the Coronavirus (Covid-19) pandemic.
The benchmark repurchase (repo) rate was left unchanged at 4 per cent (+/- 2 per cent), Governor Shaktikanta Das said while announcing the decisions taken by the central bank’s Monetary Policy Committee (MPC).
Meanwhile, the reverse repo rate will also continue to earn 3.35 per cent for banks for their deposits kept with the RBI.
Governor Das said the MPC of the RBI voted to keep interest rates unchanged and continue with the accommodative stance to support growth.
Das said that inflation had returned to a tolerance band (of 4 per cent). He further said that outlook on growth had turned positive and signs of recovery had also strengthened further.
Saying that GDP growth was projected at 10.5 per cent for the next fiscal, Das said that the Budget had provided impetus to health and infra sectors.
He further said that vegetables prices were likely to remain soft in the near term and inflation would be revised to 5.2 per cent in Q4FY21.
The RBI governor said that the government would review the inflation target for RBI by March 2021 and that inflation targeting had worked well.