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RBI keeps benchmark interest rates unchanged, sees GDP contracting by 9.5% in FY2020-21

Shaktikanta Das. FileThe monetary policy committee of the Reserve Bank of India has unanimously decided to keep the key lending rates unchanged, Governor Shaktikanta Das said on Friday.The MPC voted unanimously to leave the policy repo rate unchanged at 4%. The MPC also decided to continue with its accommodative policy stance till as long as required this year and next year, he said.“After the steep decline into which global economy plunged in second quarter of this year, there’s a rebound in activity in the third quarter but it is not even,” Mr. Das observed.The Indian economy is entering a decisive phase in the fight against COVID-19. By all indications, the deep contractions of Q1 2020-21 are behind us. Silver linings are among us, Mr. Das said adding that he always “dared to be an optimist.”

The focus must now shift from containment to revival, Mr. Das said.Undeterred by the pandemic, rural economy has been resilient. Early estimates suggest foodgrain production is set to cross another record in 2020-21.Migrant labour is returning to work in urban areas, factories and construction activity are coming back to life. Online commerce is booming, and people are getting back to offices, Mr. Das listed.Mr. Das said he expects Q4 to record a positive growth.

News source ~ The Hindu