Lending Rates To Remain Unchanged, GDP Growth Negative: RBI Governor

RBI Governor Live news: Even as real GDP growth for 2020-21 as a whole is also estimated to be negative, the governor said the accommodative stance of the monetary policy will continue as long. The central bank didn't alter the reverse repo rate which stands at 3.3 per cent.

Reserve Bank of India Governor Shaktikanta Das. (File Photo/ AFP)

New Delhi: In the central bank's Bi-monthly Monetary Policy review on Thursday, the repo rate remained unchanged at 4 per cent while RBI governor Shaktikanta said GDP to remain in the contraction phase and inflation to stay elevated. The GDP growth in the first half of the year is estimated to remain in the contraction zone. For the year 2020-21 as a whole, real GDP growth is also estimated to be negative, said the governor. The central bank didn't alter the reverse repo rate which stands at 3.3 per cent. Inflation is expected to be at elevated levels during the second quarter, but may ease in the second half of the current fiscal year. Supply chain disruptions persist, resulting in inflation pressures across segments, RBI Governor Shaktikanta Das said while announcing the decisions taken by the central bank’s Monetary Policy Committee (MPC). He mentioned that RBI is perhaps the only central bank in the world that has set up a special quarantine facility for continuity of critical operations. Governor Shaktikanta Das said the accommodative stance of the monetary policy will continue as long as necessary to revive growth and mitigate the impact of Covid-19 pandemic, while ensuring that inflation remains within target going forward. The RBI's recent policies have focused on financial stability and the need to support growth despite the price target. Annual retail inflation rose in June to 6.09 per cent from 5.84 per cent in March, remaining above the RBI's medium-term target range of 2-6 per cent, according to business daily Mint. Repo rate has already witnessed a cut of a total of 115 basis points since February apart from 135 basis points decrease in an easing cycle last year, from 6.50 per cent in view of slower growth. In view of the relentless Covid-19 situation, a further monetary easing has been expected besides clarity on relaxation in loan EMIs. The government gradually eased restrictions in June although coronavirus cases continue to rise. On Covid-19 related situation and the rising infections, the central bank proposes to take regulatory and developmental measures such as to enhance liquidity support for financial markets besides strengthening credit discipline. Also Watch: ED questions Rhea Chakraborty's CA, actress to be quizzed too