RBI Monetary Policy | Central Bank keeps repo rate unchanged at 4%; maintains accommodative stance

RBI Governor Shaktikanta Das (PTI)

The Reserve Bank of India (RBI) on October 9 maintained repo rate—its key lending rate—unchanged at 4 percent.

It has also kept the door open for lowering rates further by retaining an “accommodative” policy stance, for as long as needed, to support growth, Governor Shaktikanta Das said on October 9.

The RBI Governor in his speech on October 9 said, "The MPC evaluated domestic and global macroeconomic and financial conditions and voted unanimously to leave the policy repo rate unchanged at 4 per cent. It also decided to continue with the accommodative stance of monetary policy as long as necessary – at least during the current financial year and into the next year – to revive growth on a durable basis and mitigate the impact of COVID-19, while ensuring that inflation remains within the target going forward."

Moreover the other key rates have also been kept as they were.

Governor Das said, "The Marginal Standing Facility (MSF) rate and the Bank rate remain unchanged at 4.25 per cent. The reverse repo rate stands unchanged at 3.35 per cent."

All members of the MPC – Dr. Shashanka Bhide, Dr. Ashima Goyal, Prof. Jayanth R. Varma, Dr. Mridul K. Saggar, Dr. Michael Debabrata Patra and Shri Shaktikanta Das – unanimously voted for keeping the policy repo rate unchanged and continue with the accommodative stance as long as necessary to revive growth on a durable basis and mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward.

Dr. Shashanka Bhide, Dr. Ashima Goyal, Dr. Mridul K. Saggar, Dr. Michael Debabrata Patra and Shri Shaktikanta Das voted to continue with the accommodative stance at least during the current financial year and into the next financial year, with Prof. Jayanth R. Varma voting against this formulation.

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This was the first time the central bank did not cut repo rate after previous five consecutive cuts since February 2019.

This is a developing story. Watch out for more updates