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MPC uses non-interest tools to set a fine example of being dovish without cutting rates: Experts

The RBI shows readiness to undertake further measures as necessary to assure market participants of access to liquidity and easy financing conditions.

October 09, 2020 / 07:22 PM IST

On expected lines, the Reserve Bank of India (RBI) on October 9, maintained a status quo on key lending rates and kept its policy stance 'accommodative’.

It sees the end of economic contraction in Q4FY21 as green shoots are visible now following PMI data.

"The modest recovery in various high-frequency indicators in September 2020 could strengthen further in the second half of 2020-21 with progressive unlocking of economic activity. For the year 2020-21 as a whole real, GDP is expected to decline by 9.5 percent, with risks tilted to the downside, but if the current momentum of upturn gains ground, a faster and stronger rebound is eminently feasible," said RBI Governor Shaktikanta Das in a policy statement.

The expected GDP contraction for FY21 at 9.50 percent is also quite close to most of the market estimates, with the Q4 number most likely turning positive number, Joseph Thomas, Head of Research - Emkay Wealth Management told Moneycontrol.