RBI: No change in policy rates, accommodative stance to continue

The repo rate, the rate at which banks borrow money from the RBI for a short term, will remain at 4%. while the reverse repo rate, the rate at which banks park their surplus funds with the RBI, will remain at 3.35%.

New Delhi/Mumbai:Reserve Bank of India has decided to maintain the status quo in policy rates following a meeting of a six-member monetary policy committee (MPC), which unanimously voted in favour of maintaining the benchmark inter-bank lending rate at 4%.

The majority of the members also voted in favour of maintaining the accommodative stance in the RBI’s monetary policy meeting, which means the Reserve Bank will continue with its liquidity boosting measures due to the cash-flow difficulties created by the outbreak of the Covid-19 pandemic.

With this announcement, the repo rate, the rate at which banks borrow money from the RBI for a short term, will remain at 4% while the reverse repo rate, the rate at which banks park their surplus funds with the RBI, will remain at 3.35%. The RBI was widely expected to maintain the status quo policy rates.

More to follow...