Powered by
Sponsored by

RBI keeps repo rate unchanged at record low of 4% as virus lashes economy

Announces Rs 15,000-cr liquidity window for COVID-battered hospitality industry

Shaktikanta das RBI Governor Shaktikanta Das | PTI

The Reserve Bank of India (RBI) has kept repo rate unchanged at a record low of 4 per cent and will continue its accommodative policy stance as long as required as the Indian economy reels under the second wave of COVID-19. The monetary policy committee voted unanimously to leave the benchmark repo rate unchanged at 4 per cent. 

Policy support from all sides is required to nurture growth, said RBI Governor Shaktikanta Das as he announced a Rs 15,000-crore liquidity window for contact-intensive sectors like hotels, travel firms, restaurants hit hard by COVID-19 pandemic. Under it, banks can provide loans of three-year tenures to these sectors such as hospitality, bus operators, tourism, salons and aviation ancillary services. Banks can park an equivalent amount with RBI at 25 bps above the reverse repo rate, Das added.



The central bank, meanwhile, cut the economic growth forecast for the current fiscal from 10.5 per cent announced in the last policy meeting to 9.5 per cent taking into account the devastation of the second wave. 

The RBI also projected retail inflation at 5.1 per cent in 2021-22, with 5.2 per cent in Q1, 5.4 per cent in Q2, 4.7 per cent in Q3 and 5.3 per cent in Q4. "The recent fall in inflation provides elbow room; policy support from all sides is required to regain growth momentum. A normal monsoon to provide tailwind for economic revival," Das expressed hope. 

The governor also announced that another round of Government Securities Acquisition Program (G-SAP 1.0) worth Rs 40,000 crore will be conducted on June 17. Additionally, G-SAP 2.0 of Rs 1.2 lakh crore will be conducted in Q2 FY22.

Further, the National Automated Clearing House (NACH) payment system will be available on all days of the week from August 1. "In order to further enhance customer convenience, and to leverage the 24x7 availability of RTGS, NACH which is currently available on bank working days, is proposed to be made available on all days of the week effective from August 1, 2021," Das said on Friday.



TAGS

📣 The Week is now on Telegram. Click here to join our channel (@TheWeekmagazine) and stay updated with the latest headlines