The newly-constituted Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has left the repo rate unchanged and maintained accommodative monetary policy stance in its first three-day bi-monthly meeting that concluded on Friday. "The RBI will maintain an accommodative monetary policy stance to support growth," RBI Governor Shaktikanta Das said on monetary policy on Friday.
The Monetary Policy Committee (MPC) voted unanimously to keep policy repo rate unchanged at 4 per cent, while the reverse repo rate remains at 3.35 per cent.
"The MPC also decided to continue with the accommodative stance of monetary policy as long as necessary at least through the current financial year and next year," Das said.
"After the steep decline into which the global economy plunged in the second quarter of this year, there's a rebound in activity in the third quarter but it is not even. The focus must shift from containment to reviving the economy," the RBI governor said.
The RBI governor said India's real GDP will contract by 9.5 per cent in the current fiscal. Inflation is likely to ease to the projected target by the fourth quarter of the current financial year.
Das said that modest recovery in the first half of the year could further strengthen in the second half with economic activity to gain traction in the third quarter. "The GDP growth may break out of contraction and enter the positive zone by Q4 of the current fiscal," he sounded optimistic.
The central bank will also maintain a comfortable liquidity position with a Rs 20,000 crore-OMO auction next week, Das added.
