Srinagar, Aug 06: RBI governor Dr. Shaktikanta Das Thursday said that the apex bank’s monetary policy committee has decided to unanimously leave the policy repo rate unchanged at 4 per cent.
He further said that RBI will continue with the accommodative stance of monetary policy as long as necessary to revive growth, mitigate the impact of COVID-19, while ensuring that inflation remains within the target going forward.
According to news agency Kashmir Indepth News Service (KINS) in an address after the conclusion of the three day MPC meeting via video conferencing, Dr.Das said the Marginal Standing Facility (MSF) rate and the Bank rate remain unchanged at 4.25 per cent.
“The reverse repo rate stands unchanged at 3.35 per cent. He said the MPC’s assessment is that the global economic activity has remained fragile and in retrenchment in the first half of 2020,” he said.
The MPC also observed that a renewed surge in COVID-19 infections in major economies in July has subdued some early signs of revival that had appeared in May and June. The MPC is also of the view that the global financial markets, however, have been buoyant, with the return of risk-off sentiment in a disconnect from the underlying state of the real economy.
The RBI Governor said the headline CPI inflation, which was at 5.8 per cent in March 2020, was placed at 6.1 per cent in the provisional estimates for June 2020.
He said given the uncertainty surrounding the inflation outlook and extremely weak state of the economy in the midst of an unprecedented shock from the ongoing pandemic, the MPC decided to keep the policy rate on hold, while remaining watchful for a durable reduction in inflation to use available space to support the revival of the economy.