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Interest rates to remain unchanged as RBI keeps repo rate at 4%

RBI governor Shaktikant Das informed that the projection of real GDP growth for 2021-22 is retained at 10.5%.

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Your EMI rates will remain the same as the Reserve Bank of India has kept the repo rate unchanged at 4%, sticking to its accommodative monetary policy amid concerns that rising COVID-19 infections could derail the country's economic recovery. The reverse repo rate stands at 3.35%.

Making the announcement, RBI governor Shaktikant Das informed that the projection of real GDP growth for 2021-22 is retained at 10.5%.

"The recent surge in COVID19 cases adds uncertainty to the domestic growth outlook amid tightening of restrictions by some state governments," he added.

The central bank has slashed the repo rate by a total of 115 basis points (bps) since March 2020 to soften the blow from the pandemic. This follows 135 bps worth of rate cuts since the beginning of 2019.

This came amid a sharp new wave of Covid-19 cases in several states and local lockdowns, reigniting uncertainty regarding economic outlook in the immediate term.

Repo is the rate at which RBI lends funds to commercial banks when needed. It is a tool that the central bank uses to control inflation. The reverse repo rate is the rate at which the RBI borrows from banks.

 

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