The repo rate was held at 4% while the reverse repo rate was left unchanged at 3.35%.
The Reserve Bank of India kept rates steady at record low levels as widely expected on February 5 and reiterated that it will continue to support the recovering economy by ensuring ample rupee liquidity in the banking system.
This was the fourth time in a row that the RBI was leaving interest rates unchanged.
The repo rate or RBI’s key lending rate was held at 4% while the reverse repo rate or its borrowing rate was left unchanged at 3.35%.
The repo rate has been cut by a total 115 basis points since March 2020 to cushion the shock from the pandemic, following a 135 bps reduction since the beginning of 2019.
RBI Governor Shaktikanta Das said, “the Central bank would maintain accommodative monetary policy stance to support growth, keep inflation at targeted level.” He added that inflation has returned to tolerance band (of 4%).
“Outlook on growth has turned positive; signs of recovery strengthen further,” Mr. Das said.
He said the GDP growth was projected at 10.5% for next fiscal.
“The Budget has provided impetus to health and infra sectors. Vegetables prices likely to remain soft in near term; inflation to be revised to 5.2 pc in Q4 of FY21.”
With inputs from PTI.