The country's economy was derailed due to the Coronavirus induced lockdown. As a result, the GDP growth rate in the last two quarters was at minus one. In such a situation, there is a risk of economic recession in the country. Meanwhile, the Reserve Bank of India (RBI) has unchanged the repo rate at 4%. It has spoken of improving the economy soon. It also predicted that the GDP growth rate will come to plus in the third quarter of the current financial year and there will be further improvement in the fourth quarter.
At present, rural demand is improving rapidly, in such a situation, it is expected that soon urban demand will also increase.
The RBI has not made any changes in its new monetary policy. The Monetary Policy Committee unanimously voted to keep the policy repo rate at 4% without any alteration. The MSF rate and bank rate are 4.25% with no change and the reverse repo rate is 3.35% with no change. Shaktikanta Das, Governor of the Reserve Bank of India, shared this information himself after the committee meeting.
It is worth noting that even during the last monetary review, the RBI did not cut the repo rate. Presently, the repo rate is at 4% while the reverse repo rate is at 3.35%. It was believed that the central bank could keep the key policy rates unchanged in view of rising inflation rate. Similar results came out after the meeting. Governor Das said that the meeting unanimously voted in favor of keeping the policy repo rate unchanged at 4 percent.
This situation will continue at least till this financial year and next financial year so that growth can be sustained. Das said that the marginal standing facility rate and bank rate have been kept unchanged at 4.25 per cent.