RBI keeps repo rate unchanged at 4%, GDP forecast upgraded

Reserve Bank of India on Friday decided to keep benchmark interest rate unchanged at 4% but maintained an accommodative stance, implying more rate cuts in the future if the need arises to support the economy hit by the COVID-19 crisis.

The monetary policy committee also decided to retain an accommodative policy stance at least for the current financial year and into the next year to revive growth on a durable basis, Governor Shaktikanta Das said in an online briefing.

The key lending rate of the RBI or the repo rate was left unchanged at 4% while the reverse repo rate or the key borrowing rate stayed at 3.35%.

Governor Das also said that the real GDP growth for 2021 is projected at -7.5%.

The central bank has slashed the repo rate by 115 basis points (bps) since late March to cushion the shock from the coronavirus crisis and sweeping lockdowns to check its spread.

Economists and market participants are closely awaiting commentary from the RBI about liquidity conditions. 

(With inputs from agencies)