RBI keeps repo rate unchanged at 4 pc, maintains accommodative stance

The Reserve Bank of India (RBI) on Friday kept the repo rate unchanged at 4 per cent and maintained the policy stance at accommodative.

The RBI's Monetary Policy Committee (MPC) made a unanimous decision to maintain status-quo after a three-day meeting that began on December 2.

The reverse repo rate also remains steady at 3.35 per cent, RBI Governor Shaktikanta Das said. He added that the MPC will maintain the accommodative stance "for as long as necessary."

Das said the MPC was of the view that inflation is likely to remain elevated with some relief in the winter months from prices of perishables and bumper kharif arrivals.

Repo is the rate at which RBI lends funds to commercial banks when needed. It is a tool that the central bank uses to control inflation. Reverse repo rate is the rate at which the RBI borrows from banks.

While there are some signs of a pick up in economic activity due to the staggered easing of a lockdown, there is a large degree of uncertainty amid a surge in coronavirus cases.

(ANI)

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