The Reserve Bank of India (RBI) on Friday kept key interest rates unchanged and maintained an accommodative stance in order to aid further economic recovery.
The central bank’s Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 4 per cent while the reverse repo rate has been maintained at 3.35 per cent.
RBI Governor Shaktikanta Das said the MPC will maintain status quo till the economy recovers from the impact of the second wave of the Covid-19 pandemic. But Das clarified that the country is in a much better position and many economic indicators have improved.
“The need of the hour is not to drop our guard and to remain vigilant against any possibility of a third wave especially in the background of rising infections in certain parts of the country,” RBI Governor Shaktikanta Das said in a virtual address accompanying the MPC’s decision.
“Economy recovering from setback of 2nd wave of Covid-19 and economic activity to pick up on vaccination,” he added.
However, the central bank governor said more needs to be done to restore the supply-demand balance in the economy.
Shaktikanta Das said that a good monsoon and improving economic indicators are likely to support economic growth future. The RBI’s announcement is in line with what analysts had predicted earlier.