RBI has managed to keep the repo rate at unchanged 4%, the lowest on record

On Thursday Reserve Bank of India (RBI) decides to keep the repo rate at 4 percent. It is the lowest repo-rate since 2000 originally reverse repo rate at 3.35 percent.


Many of the government work has slowed down because of the COVID-19 pandemic.
Central banks also provided some loan facilities. This facility is started on March 1, 2020. An expert committee will be set up for K V Kamath to keep out non-eligible borrowers.


This decision is to announce after the 24th bi-monthly meeting of the RBI’s six-member Monetary Policy Committee (MPC). This meeting is led by Governor Shaktikanta Das. RBI has last revised its policy regarding the repo rate on May 22.

Governor Shaktikanta Das said the MPC voted to keep interest rate unchanged and they wanted to support the repo-rate. She also that Global economic activity has remained important.

Condition of Repo-rate

There is a sign of improvement in the repo-rate but due to in Covid-19 cases, when this pandemic is stopped, said Das. The Monetary Policy Committee (MPC) said that the inflation in the country will remain in the second quarter of 2020-21 and there is some hope of its fall in the second half of the year.


On the economic growth front, Governor Das said, without putting any number to it, that India’s real gross domestic product would contract in the first half of FY21 as well as full financial year.

RBI has also announced some additional funds of 5000 crores for the National Bank for Agriculture and Rural Development (Nabard) and the National Housing Bank (NHB). RBI has made some new guidelines to remove regional disparities and expect a higher weight would be accord to districts with lower credit flows.

According to the research report by the country’s largest lender, banks have cut rates on fresh loans by 72 basis points. This is the fastest transmission ever record, during this period. State Bank of India has itself cut by 115 basis points on its repo-linked retail loan chart.

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