RBI releases bi-monthly policy: Repo rate unchanged
On February 6, 2020, the Reserve Bank of India released its bi-monthly monetary policy. The apex bank has kept the policy repo rate unchanged. It remains at 5.15%.
Observations of the Committee
The Monetary Policy Committee that meets once in two months under the chairmanship of its Governor has made the following observations
- The inflation has increased and the unusual price hike in onions has been the main reason behind price rise. The Retail Inflation has increased from 4.6% in October to 5.5% in November. It increased further to 7.4% in December 2019. It is the highest since July 2014.
- The Committee estimates CPI for Q4 of the Financial Year 2020 at 6.5%. For Q3, it was at 3.2%.
- The Reverse Repo Rate under the Liquidity Adjustment Facility remained unchanged at 4.9%
- The Bank Rate and the Marginal Standing Facility Rate stood at 5.4%
Economic Slowdown
According to RBI, the economic slow down is mainly due to muted corporate investments, weak household spending and slowdown in construction and manufacturing activity.
Originally written on
February 6, 2020
and last modified on
November 20, 2020.
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