Real GDP growth for 2021 projected at -7.5 per cent: RBI Governor
New Delhi, Dec 04: The Monetary Police Committee (MPC) has voted to unanimously to keep the repo rate unchanged at 4 per cent, Reserve Bank of India (RBI) Governor, Shaktikanta Das said.
The MPC has decided to continue with accommodative stands of money policy as long as necessary, at least until the current fiscal year and into next year to revive growth on a durable basis and mitigate the impact of COVID-19, while also ensuring that inflation remains within the target, the RBI Governor also said.
Das also said that the Marginal Standing Facility (MSF) rate an bank rate remain unchanged at 4.25 per cent. The reverse repo rate remains unchanged at 3.35 per cent.
Das said that the RBI is committed to preserve depositors' interest in financial system. He also said that the financial markets are working in an orderly fashion. There are nascent signs of economic recovery in Q2 of the current fiscal, Das further added.
The RBI is ready to take further measures to ease liquidity and will continue to respond to global uncertainty, he also said. We will use various instruments at appropriate times to ensure ample liquidity is available in the system, Das further said.
He also said that the core inflation remains sticky and the CPI inflation is projected at 6.8 per cent in Q3 and 5.8 per cent in Q4. He also said that the economy is recuperating faster with more sectors joining the recovery path.
The real GDP growth for 2021 is projected at minus 7.5 per cent. The recovery in rural demand is expected to strengthen further while urban demand is also gaining momentum, Das said.
He further said that the GDP growth will turn positive in Q3 with 0.1 per cent expansion. Q4 would see 0.7 per cent growth and FY21 growth would be at minus 7.5 per cent.
The role of the RBI as debt manager and banker to the government was tested to the hilt in 2020. It marked the highest ever level of market borrowing and our policies resulted the lowest ever borrowing cost in 16 years.