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RBI lets key interest rates stay low to spur growth

The RBI on Friday left key interest rates untouched at current levels, which are at a record low, in order to make enough money available in the banking system to led support to economic activities which are recovering after the devastating pandemic blow.

The repo rate or RBI’s key short-term lending rate has been kept at 4% while the reverse repo rate at which it borrows from banks for the short-term remains at 3.35% after the monetary policy review meeting.

The repo rate has now been reduced by 1.15 per cent since March last year to support the economy during the pandemic. Before that it had been cut by 1.35 per cent during 2019.

RBI Governor Shaktikanta Das said the monetary policy committee (MPC) unanimously decided to keep rates on hold. He said that the economy’s growth outlook had improved and that inflation was expected to remain at around 5% which was within the RBI’s targeted range in the coming months.