Explained: Why the RBI kept repo rates unchanged
The RBI has kept the repo rate – the rate at which the RBI lends funds to banks – unchanged at four per cent and the reverse repo rate - the rate at which RBI borrows from banks – at 3.35 per cent.
Reserve Bank of India Governor Shaktikanta Das (Express Photo/File) The Monetary Policy Committee (MPC) of the Reserve Bank of India on Wednesday kept key policy rates unchanged for the ninth time in a row and decided to “continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward”.
What are the current policy rates?
The bank has kept the repo rate — the rate at which the RBI lends funds to banks — unchanged at four per cent and the reverse repo rate — the rate at which RBI borrows from banks — at 3.35 per cent. The bank rate — the rate at which RBI lends short-term funds to banks sans security — also remains unchanged at 4.25 per cent. The six-member panel voted 5-1 to retain the accommodative policy.
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