RBI keeps repo rate unchanged but maintains accommodative stance1 min read . Updated: 04 Dec 2020, 10:04 AM IST
- Retail inflation remained above 7% in October for a second straight month
The Reserve Bank of India today kept interest rate unchanged amid stubbornly high inflation and signs of recovery in Asia’s third-largest economy. The six-member Monetary Policy Committee unanimoukept interest rate held the benchmark repo repo rate 4%.
The RBI has so far this year repo rate by 115 basis points but a spike in consumer prices forced the panel to pause in recent policy reviews.
In the October review, the RBI had said that it expected the economy to shrink 9.5% in the year to March.
Retail inflation remained above 7% in October for a second straight month, with vegetable prices at elevated levels - well above the RBI’s medium term target of 4%.
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.