Indian Central Bank To Continue Accommodative Monetary Policy

NEW DELHI, Dec 4 (Bernama) -- India's central bank today kept key interest rates unchanged and said it would continue its accommodative monetary policy as long as necessary while the country battles the debilitating effect of COVID-19 on the economy. The Reserve Bank of India (RBI) monetary policy committee voted unanimously to leave the policy repo rate unchanged at four per cent. "It also decided to continue with the accommodative stance of monetary policy as long as necessary, at least through the current financial year and into the next year, to revive growth on a durable basis and mitigate the impact of COVID-19, while ensuring that inflation remains within the target going forward," RBI governor Shaktikanta Das said in a statement. The reverse repo rate remained unchanged at 3.35 per cent. The RBI said further efforts were needed to tackle inflation pressures. It forecast retail inflation at 6.8 per cent in the current quarter and 5.8 per cent in the January-March final quarter of the fiscal year. "The outlook for inflation has turned adverse relative to expectations in the last two months," the central bank chief noted. He said the year 2020 has been "extremely challenging" in view of the pandemic and signs of economic recovery far from being broad-based and dependent on sustained policy support. The Indian economy shrank 7.5 per cent in the July-September quarter whereas it suffered a decline of 23.9 per cent in the April-June quarter. -- BERNAMA