February 6, 2020
The Reserve Bank of India (RBI) on Thursday kept the key repo rate unchanged 5.15 per cent in its first monetary policy Review after Budget 2020-21.
The six-member Monetary Policy Committee (MPC) maintained an accommodative stance in the sixth bi-monthly policy meet of 2019-20. It estimated a 6 per cent GDP growth rate for 2020-21 while projecting a 6.2 per cent growth rate for October to December 2020.
The central bank said it will maintain an accommodative stance for as long as it is required to revive the economy. The committee also said that the economy continues to remain weak and the output gap is negative.
All six members of Monetary Policy Committee voted in favour of maintaining status quo on the key interest rate. RBI’s MPC was widely expected to keep rates unchanged due to rising inflationary rate and slow transmission of already announced interest rate cuts.
As far as inflation is concerned, RBI anticipated it to remain elevated in the short-run and that it remains “highly uncertain”.
Commenting on the February policy review, RBI Governor Shaktikanta Das said the repeat of status quo in monetary policy should not be seen as future policy action and it has several instruments at its command to tackle present economic challenges.