Mumbai, August 6: RBI governor Shaktikanta Das addressed the media today at noon. He announced that the GDP growth in the first half of the year is estimated to remain in the contraction zone. "For the year 2020-21 as a whole, real GDP growth is also estimated to be negative," said RBI governor Das.
It was also announced that the repo and the reverse repo rate would remain unchanged in RBI's Bi-monthly Monetary Policy. The RBI governor announced that the repo rate would remain unchanged at 4 percent. The reverse repo would also remain unchanged at 3.3 percent. RBI Monetary Policy: Repo Rate Unchanged at 4%, Reverse Repo Remains Unchanged at 3.3%.
RBI governor highlighted that the main focus would be to improve the flow of credit, deepen digital payment systems and facilitate innovations by leveraging technology.
FY21 Real GDP Growth Expected to be negative, Says RBI
Taking into consideration all factors, the GDP growth in the first half of the year is estimated to remain in the contraction zone. For the year 2020-21 as a whole, real GDP growth is also estimated to be negative: Reserve Bank of India (RBI) Governor Shaktikanta Das pic.twitter.com/lc43RZRs0x
— ANI (@ANI) August 6, 2020
The RBI's recent policies have focused on financial stability and the need to support growth despite the price target. The RBI has already reduced the repo rate by a total of 115 basis points since February, on top of the 135 basis points in an easing cycle last year.
The economic situation of India has been on a major slide owing to the coronavirus induced lockdown. From job losses to industries being shut, the economy has been badly trying to stay afloat amid the coronavirus pandemic. In March, the lockdown was imposed by the Narendra Modi government, and it lasted for two months. The area of concern lies in the fact COVID-19 cases continued to rise and the tally inches closer to 20 lakh mark on Thursday.
Prior to the RBI policy announcement, economists remained divided over whether the central bank would ease monetary policy further, by reducing the repo rate, despite inflation remaining way beyond its comfort zone.
(The above story first appeared on LatestLY on Aug 06, 2020 12:30 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).