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Reserve Bank's MPC retains repo rate at 4%, maintains accommodative stance

Reserve Bank's MPC retains repo rate at 4%, maintains accommodative stance

The RBI's monetary policy committee today unanimously decided to leave the policy repo rate unchanged at 4% and the reverse repo rate at 3.35% against a backdrop of rising inflationary pressure and a grim economic outlook.

This is the lowest level recorded since 2000.

The MPC also maintained its "accommodative" stance on monetary policy - which rules out any hike in the key rate for the time being - in view of the Covid-19 situation. It has remained accommodative since before the pandemic.

The Committee expects inflation to remain elevated in Q2, ease in second half of fiscal, RBI Governor said.

RBI Governor Shaktikanta Das made the announcement after the central bank's bi-monthly Monetary Policy meeting that began on August 4. This is the 24th, and last meeting of the current members of the MPC.

This is the first scheduled policy review since February. The six-member MPC has already met twice outside its bi-monthly cycle, first in March and then in May, on account of the fast-changing macroeconomic situation arising from the pandemic

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