The Reserve Bank of India (RBI) kept interest rates steady at record lows on Friday, as widely predicted, as it assesses the impact of a devastating second wave of COVID-19 infections on the economy.
The RBI held the repo rate, its key lending rate, at 4% and kept the reverse repo rate, the borrowing rate, unchanged at 3.35%.
The RBI has slashed the repo rate by a total of 115 basis points (bps) since March 2020 to soften the blow from the pandemic. This follows 135 bps worth of rate cuts since the beginning of 2019.
Addressing the media, RBI Governor Shaktikanta Das said a normal monsoon will provide tailwind for economic revival.
He also said the economic growth forecast for current fiscal would likely be 9.5%, which is lesser than the previous projection of 10.5%.
The RBI also projected retail inflation at 5.1% in 2021-22.
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