RBI monetary policy: Key rates unchanged, GDP likely to contract by 9.5%

The Reserve Bank of India has announced that key interest rates will remain unchanged and decided to maintain its accommodative monetary policy stance to support growth amid the pandemic.

‘The accommodative stance would remain as long as necessary, at least through 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,’ Das said.

Announcing the monetary policy, RBI governor Shaktikanta Das said that the deep contractions of quarter one of 2021 now seem to be behind us and silver linings are visible.

He also added that India’s focus must now shift from containment to revival in the days ahead.

Das however also said that India’s GDP would contract by 9.5 per cent in the current fiscal due to the disruptions caused by the coronavirus pandemic.

The RBI governor added that the GDP growth may come out of contraction and turn positive by quarter four.

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