85 breached
The Indian rupee has breached the significant psychological barrier of 85 against the US dollar, marking an all-time low amid a confluence of domestic and global pressures.
Country’s real GDP growth rate will continue to contract in the FY 2020-21, due to the damage caused by the coronavirus pandemic-induced lockdown, said Governor Shaktikanta Das said on Thursday.
Addressing the media after the Monetary Policy Committee’s (MPC) bi-monthly meeting Governor Das said that the Reserve Bank of India (RBI) expects country’s real GDP growth rate for the first half of FY21 to remain in the negative territory. However, he added that any positive development on the containment of the COVID-19 pandemic would change the scenario.
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Das was of the view that the world may face a second wave of the novel coronavirus cases as the economies around the world are opening for business. “World is bracing for a second wave of the pandemic as economies open up,” he said.
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The central bank maintained the key lending rates while maintaining its accommodative stance, thus opening up possibilities for more future rate cuts. The MPC of the central bank maintained the repo rate or short-term lending rate for commercial banks, at 4 per cent. The reverse repo rate has also been maintained at 3.35 per cent.
Keeping the economic stress caused by the pandemic, the Reserve Bank of India also decided to permit a one-time restructuring of corporate loans. The central bank is also constituting an expert committee under KV Kamath that will look into resolution plans and other required financial parameters to be factored in it.
The MPC expects elevated inflation levels during the second quarter but may ease in the second half of the current fiscal year.
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