In today’s (4.12.2020) bimonthly MPC meeting, the Reserve Bank of India decided to maintain the policy repo rate under the liquidity adjustment facility (LAF) on hold at 4.0 per cent.
The MPC also decided to continue with the accommodative stance as long as necessary, at least during the current financial year and into the next financial year, to revive growth on a durable basis and mitigate the impact of COVID-19 on the economy, while ensuring that inflation remains within the target going forward.
The MPC in today’s statement further said that its decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.
Today’s was the third meeting on run that the central bank chose to keep the rates unchanged. Consequently, the following l key policy rates with effect from May 22, 2020 continue to remain same from August 6, 2020.
| CRR (Cash Reserve Ratio) | 3.00% |
| SLR (Statutory Liquidity Ratio) | 18.00 % |
| Repo Rate | 4.00% |
| Reverse Repo Rate | 3.35% |
| MSF Rate (Marginal Standing Facility Rate) | 4.25% |
| Bank Rate | 4.25% |
All other terms and conditions of the extant LAF Scheme will remain unchanged.
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