Reserve Bank of India (RBI) governor Shaktikanta Das on Thursday (6 August) announced crucial policy decisions at the Bank's bi-monthly monetary policy press conference, Hindustan Times reported.
The RBI, taking an important decision, left the repo and reverse repo rates unchanged at 4 per cent and 3.3 per cent respectively.
The RBI governor held the press meet via video conferencing given the risks of COVID-19 spread.
The Monetary Policy Committee (MPC) of the central bank has maintained the repo rate -- or short-term lending rate for commercial banks, The governor said.
Das said, the MPC has noted that economic activities had started to recover in India, but, he added, "surges of fresh infections have forced fresh lockdowns, hence several high-frequency indicators have levelled off."
The MPC also voted to maintain accommodative stance, thus opening up possibilities for more future rate cuts.
Addressing the hardships that the economy is facing due to COVID-19 pandemic, the central bank said the MSME borrowers will remain eligible for restructuring of debt, if their accounts were classified standard.
"With COVID19 infections rising under fragile micro-economic and financial conditions, we propose to take regulatory and developmental measures - enhance liquidity support for financial markets, ease financial stress caused by COVID19 while strengthening credit discipline, improve the flow of credit, deepen digital payment systems and facilitate innovations by leveraging technology," said Das.
Das also told that the RBI is "perhaps the only central bank in the world which has set up a special quarantine facility" to maintain the continuity of critical operations.
(With inputs from IANS)
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