Sensex crosses 45,000 mark for first time as RBI revises GDP target to -7.5%
Sensex on Friday breached the 45,000 points mark as the Reserve Bank of India announced the Monetary Policy statement, keeping the repo rate unchanged at 4 percent and revised its projection for real GDP growth to -7.5 percent in the financial year 2020-21 from -9.5 percent which it had announced in October.
RBI Governor Shaktikanta Das said the central bank expects the economy to record positive growth in the second half of the current financial year.
In the October monetary policy statement, the RBI had projected the contraction in the GDP at 9.5 percent. RBI had said the real GDP growth in 2020-21 is expected to be negative at (-) 9.5 percent, with risks tilted to the downside (-) 9.8 percent in Q2 2020-21; (-) 5.6 percent in Q3; and 0.5 percent in Q4.
on Friday, Shaktikanta Das said the GDP is expected to turn positive in the third quarter and expand at 0.1 percent. The last quarter is likely to see an expansion of 0.7 percent.
The economy contracted by 23.9 percent in the first quarter and 7.5 percent in the second quarter on account of the coronavirus pandemic.
"The second half is expected to show some positive growth," RBI Governor Shaktikanta Das said, adding that during the financial year as a whole the economy was likely to contract by 7.5 percent, which is an improvement over its previous projection of 9.5 percent contraction.
Maintaining the status quo for the third time in a row and concerned over elevated inflation, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) kept the repo rate unchanged at 4 percent. Consequently, the reverse repo rate will also continue to earn 3.35 percent for banks for their deposits kept with the RBI.