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The article features the key features of the RBI Governor Statement issued on 5th February 2021.The article discussing the Governor’s decision of the repo rate and reverse repo rate. Here the RBI Governor Mr Shaktikanta Das has announced the MPC (Monetary Policy Committee) decision which has kept Repo rate and Reverse Repo rate unchanged. The Monetary Policy Committee has kept the repo rate unchanged at 4% and voted unanimously to maintain the status quo with accommodative stance. Mr Shaktikanta Das has projected through RBI Report that the GDP growth rate will be 10.5% for the upcoming fiscal year.
The repo rate means the rate at which the commercial bank borrows money by selling their securities to the central bank of our country to the Reserve Bank of India to maintain their liquidity, in case of shortage of funds or some statutory measures. It is one of the tools to keep inflation under control. Whereas the reverse repo rate is the mechanism in which the Reserve Bank of India borrows money from the banks when there is excess liquidity in the market. The banks are benefitted from receiving interest for their holding with the central banks.
Table of Contents
The Monetary Policy Committee has been enlisted the various reasons for keeping the repo and reverse repo rate unchanged:
It can be concluded that the RBI Governor statements over the Monetary Policy Committee happen to affect the infrastructure sector. The key implementations involve bringing in the changes in the real estate sector. MPC has been focusing on stressed sectors like real estate. The real estate requires money supply. The unchanged repo rate is beneficial. It gives momentum to the home loan and keeping the interest rate lower has positively changed and picked the real estate. The worried about some point of inflation as RBI Governor Statement clarified that it is under control post-pandemic. The push the retail investors and investment in manufacturing, the policy will influence them too.
Read our article:Effect on Repo Rate by RBI
She is B.Com (H), LL.B LLM, Cs (Module 2) And Certification In Cyber Law From ILI Qualified. She has Been A Legal Teacher In The Previous Organization. My Strength Is My Expertise Knowledge In Civil Laws, Corporate Law And Tax Laws. I Have Been Legal Teacher And Legal Trainer In The Past Organization. Her Knowledge About The Subjects Have Expanded Due To Teaching Number Students From Various Universities All Over India.
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