The Reserve Bank of India (RBI) left the repo rate unchanged at the current 4 per cent on August 6, after a three-day meeting of its Monetary Policy Committee (MPC). The six member committee decided to maintain its "accommodative" stance on policy, RBI Governor Shaktikanta Das said in a virtual address to media.
The RBI Governor said the Committee expects inflation to remain at elevated levels in the July-September period, and ease in second half of the current financial year on the back of "favourable base effect".
Following are some key highlights from the monetary policy decision:
- The RBI Governor said the war against COVID-19 is most intense at the current juncture.
- Regulatory response has to be dynamic, pro-active and balanced: RBI Governor Shaktikanta Das
- The central bank also kept the reverse repo rate, the interest rate at which the RBI borrows funds from commercial banks, unchanged at 3.35 per cent.
- The RBI has focused on keeping consumer inflation under control, within a medium-term target of 4 per cent.
- Rs 10,000 crore additional liquidity facility to be provided by National Housing Bank, NABARD: RBI Governor
- Shaktikanta Das said that loans against gold enhanced to 90% of the value from the current 75% to curb the COVID impact on households.
- Global economic activity has remained fragile, surge in COVID cases has subdued early signs of revival: Das
- With Covid-19 continuing to hit the economy, stressed MSME borrowers to be eligible for the restructuring of debt if their accounts are classified standard.
- India's economic growth to contract in the first half of fiscal beginning April 2020.
RBI allows lenders to provide a window to restructure loans of corporate, individual borrowers to ease Covid-19 impact, says Governor Das.
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