RBI Governor Shaktikanta Das announced on Friday that the Monetary Policy Committee had voted unanimously to keep the repo rate unchanged at 4 per cent.
Das made the announcement on the sidelines of the bi-monthly monetary policy review.
Experts had expected that stubborn retail inflation, which has remained above the comfort level of the RBI of around 4 per cent, would refrain the central bank from reducing interest rate.
"MPC decided to continue with accommodative stands of monetary policy as long as necessary, at least till current financial year and into next year to revive growth on a durable basis and mitigate the impact of COVID-19 while ensuring that inflation remains within target," Das was quoted as saying by ANI.
In its October monetary policy statement, the RBI had said the real GDP growth in 2020-21 was expected to be negative at (-) 9.5 per cent, with risks tilted to the downside: (-) 9.8 per cent in Q2:2020-21; (-) 5.6 per cent in Q3; and 0.5 per cent in Q4.
According to the Finance Ministry's Monthly Economic Review, the year-on-year GDP contraction of 7.5 per cent in Q2 of 2020-21 underlies a quarter-on-quarter surge in GDP growth of 23 per cent. This V-shaped recovery, evident at the half-way stage of 2020-21, reflects the resilience and robustness of the Indian economy.
