RBI Governor Shaktikanta Das today announced that the central bank's Monetary Policy Committee (MPC) has unilaterally decided to keep policy rate unchanged at 4%. But maintained an accommodative stance, implying rate cuts in the future if need arises to support the economy hit by the Covid-19 pandemic. This is the fourth time in a row that MPC has decided to keep the policy rate unchanged. The central bank had slashed the repo rate by 115 basis points since late March 2020 to support growth.
To recall, repo rate is the rate at which the RBI lends money to commercial banks, in case there is any shortfall of funds.
Consequently, the reverse repo rate will also continue to earn 3.35 per cent for banks for their deposits kept with RBI and the marginal standing facility (MSF) rate and the bank rate at 4.25 per cent.
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