RBI maintains status quo, expects annual GDP to contract by 9.5%

RBI maintains status quo, expects annual GDP to contract by 9.5%

Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday announced that the central bank’s Monetary Policy Committee (MPC) has unanimously decided to keep the key rates unchanged while maintaining an accommodative stance.

"Monetary Policy Committee voted unanimously to keep the policy repo rate unchanged at 4%. MPC also decided to continue with the accommodative stance of monetary policy as long as necessary at least through the current financial year and next year," he said.

The repo rate currently stands at 4 percent while the reverse repo rate remains unchanged at 3.35 percent. The development matches expectations of several experts who had earlier said that the RBI would maintain a status quo on key rates as retail inflation continues to remain higher than its target of 4-6 percent.

During his address, Shaktikanta Das exuded positivity about the current trajectory of economic recovery. Das said India is showing gradual improvement in growth and also added that consumer confidence is slowing turning upbeat.

Shaktikanta Das went on to added that India's GDP may break out of the contraction zone in Q4. However, Das said that India's annual GDP contraction for the current financial year will be over nine percent.