India's bank rates kept unchanged to gain growth momentum
A health worker administers a dose of the COVID-19 vaccine to a man in Hyderabad, India, on June 3, 2021. (Str/Xinhua)
The Reserve Bank of India (RBI) decided on Friday to keep the Policy Repo Rate at 4 percent and the Reverse Repo Rate at 3.35 percent to gain growth momentum and to nurture economic recovery.
Announcing this, RBI Governor Shaktikanta Das said policy support from all sides was required to gain economic recovery after a deadly second wave of the COVID-19 pandemic.
"Policy rate has been left unchanged and accommodative stance has been decided to be continued as long as necessary to revive and sustain growth, while ensuring inflation remains within target," Das said while delivering RBI's bi-monthly monetary policy.
In his address, the central bank governor also said the real gross domestic product (GDP) growth was projected to grow at 9.5 percent in 2021-22, down from earlier estimates of 10.5 percent as a result of the COVID-19 pandemic.
He said that unlike the first wave, impact on economic activity was expected to be relatively contained in the second wave, with restrictions on mobility being regionalized and nuanced.
While urban demand slowed in April and May 2021, the vaccination process was expected to gather steam in coming months and should help to normalize economic activity, said the central banker.
"The rebound in global trade is expected to support India's export sector," he said, expecting rural demand to remain strong due to forecast of a normal monsoon.
On the occasion, the governor also announced a set of additional measures with the objective of reviving the economy and mitigating the adverse impact of the COVID-19 pandemic outbreak.
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