On the 6th of February, the Reserve Bank of India (RBI) conducted its first monetary policy meeting after the Central Government announced the Union Budget for 2020-2021.
During the meeting, the RBI announced the repo rate would remain the same, that is, 5.15 %. Repo rate is said to be the rate of interest at which commercial banks in India borrow money from the Central Bank, the RBI.
The six member Monetary Policy Committee (MPC) also stated it would maintain an accommodative monetary stance, an approach to help increase the supply of money in the economy and reduce the possibility of a sudden rate hike.
In its 6th bimonthly meeting of fiscal year 2019-2020, the RBI estimated the Gross Domestic Product (GDP) growth rate would be 6 % for 2020-2021. The Committee also mentioned the RBI would continue with its monetary stance, which would help boost the economy of India. Later, the MPC members also voted in favour of retaining the key interest rate as it previously was.
Shaktikanta Das, the Governor of the RBI, explained the RBI’s decision regarding the status quo and said the global economic activity did not improve since the last meeting, hence keeping the interest rate the same may help.
The last RBI bimonthly review meeting was held in December 2019.
Stay tuned for further updates.
