Reserve Bank of India keeps key rates unchanged; exports contract for fourth straight month

The Reserve Bank of India(RBI) today announced that key rates will remain unchanged.

The RBI kept repo rate unchanged at 4 per cent. RBI governor Shaktikanta Das declared that reverse repo rate also remains unchanged at 3.3 per cent.

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While making the announcement, RBI governor Shaktikanta Das said that global financial markets remain buoyant, although he added that exports have contracted for the fourth straight month in June.

India's central bank said that the country's forex reserves are up by $56.8 billion, however it added that GDP growth will remain negative in the first half of the current year.

"For the year 2020-21 as a whole, real GDP growth is also estimated to be negative," it said.

The RBI governor added that although economic activity had picked up however due to fresh surge of coronavirus and lockdowns, several high-frequency indicators had levelled off.

"With coronavirus infections rising under fragile micro-economic and financial conditions, we propose to take regulatory and developmental measures including enhancing liquidity support for financial markets, ease financial stress caused by the virus while strengthening credit discipline," Shaktikanta Das stated.