The Reserve Bank of India on Friday revised the real GDP growth projection for 2020-21 from -9.5 per cent to -7.5 per cent. The central bank had estimated GDP to contract by 9.5 per cent in its previous assessment in October. The RBI’s optimistic stance pushed Indian shares to record highs, as BSE Sensex crossed the 45,000 mark for the first time ever.
RBI Governor Shaktikanta Das also assured that the economy will witness positive GDP growth in the second half of the financial year. The revised projection comes in the backdrop of the RBI’s decision to maintain an “accommodative” policy stance in its fifth bi-monthly monetary policy for FY21.
Retail inflation in the country rose to the highest level in October in more than six years due to higher food prices. According to Consumer Price Index (CPI) data released by the Ministry of Statistics and Program Implementation, inflation stood at 7.61 per cent in October, which was the highest level since May 2014.
The Reserve Bank of India (RBI) on Friday unanimously decided to keep key interest rates unchanged while maintaining an accommodative stance.
The Monetary Policy Committee (MPC) kept the policy repo rate, the benchmark at which RBI lends to the banks, at 4 per cent. The reverse repo rate will continue to be 3.35 per cent.
The RBI has this year slashed repo rate by 115 basis points but a spike in consumer prices forced the panel to pause in recent policy reviews.
The MPC’s decision was expected as inflation has surprised on the upside, remaining above the upper tolerance level of 6 per cent for seven months.
In the October review, the RBI had said that it expected the economy to shrink 9.5 per cent in the year to March.
Retail inflation remained above 7 per cent in October.
High-frequency indicators suggest activity picked up in October due to festival demand and inventory drawdown. While some of those positives spilled over to November, there are signs that demand is tapering off.
Read all the Latest News, Breaking News and Coronavirus News here
Comments
0 comment