The Reserve Bank of India on Friday kept the key lending rate or the repo rate unchanged at 4% and reverse repo rate or its borrowing rate at 3.35%.
Announcing the decisions of monetary policy committee, at the end of its three-day bi-monthly meeting, RBI Governor Shaktikanta Das said they will maintain the accommodative stance as long as necessary. He added that the decision to maintain status quo on lending rates was taken unanimously by the panel.
The repo rate is the rate at which the central bank lends to its clients generally against government securities. The reverse repo rate, on the other hand, allows banks to deposit funds with the RBI and earn interest on it.
India’s Gross Domestic Product growth rate for the last fiscal year contracted by an unprecedented 7.3%, government data showed on Monday. The economy grew by a higher-than-expected 1.6% in the fourth (January-March) quarter.
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