RBI predicts 9.5% contraction in GDP for FY21; keeps repo rate unchanged

New Delhi, Oct 9 (KNN) Reserve bank of India (RBI) announced monetary policy decisions on Friday. The central bank has kept repo rates unchanged at 4 percent and reverse repo rate at 3.35 percent. The RBI Governor also announced a host of new measures to be undertaken by the central bank.

RBI Governor Shaktikanta Das said on that the country's economy is likely to contract 9.5 per cent in the current financial year, "with risks tilted to the downside". While maintaining a status quo on policy rates citing high inflation. The GDP may break out of the coronavirus-induced contraction and turn positive by the fourth quarter of 2020, Governor Das said.

RBI Governor said the monetary policy committee - whose three new external members voted in today's policy action has evaluated domestic and global macroeconomic and financial conditions and voted unanimously to leave the policy repo rate unchanged at 4 per cent.

MPC 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. 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, MPC stated.