Reserve Bank of India (RBI) held its policy rate at 4%. That has been the case now in three consecutive policies. High inflation constrains the central bank from reducing policy rate any further, unlike other Emerging Markets
RBI Monetary Policy HIGHLIGHTS: Reserve Bank of India (RBI) in its sixth bi-monthly monetary policy committee (MPC) meeting voted unanimously to maintain the repo rate at 4% and the reverse repo rate at 3.35%.
For FY21, we expect GDP to contract by 11.5%, with further risks on the downside depending on the evolution of further Covid infections and the limited room available with the government for any aggressive fiscal stimulus.
In the last financial year 2019-20, the Reserve Bank of India first cut repo rates thrice, announcing one cut of 35 bps, and two of 25 bps each, bringing the policy rate down from 6% in April 2019 to 5.15 per cent