Based on the current situation and rise in the number of COVID-19 cases, RBI has decided to maintain the repo rate at 4%. The RBI governor also made a comment that RBI will remain accommodative as long as necessary to keep the growth sustainable. It is important that financial institutions are given more freedom in a situation when the country faces threat of a second lockdown. The bank rate is also maintained at 4.25% and reverse repo at 3.35%.
The real GDP contracted by 8 percent for 2021 as per NSO data. Globally, recovery is taking place at a high pace and growth is expected to hit pre-COVID levels by mid 2021. With the fast pace vaccination, the prospects for year 2021 – 22 stay bright.