RBI says economy to contract at 7.5% for FY21; keeps repo rate unchanged at 4% in accommodative stance

Business

The central bank, which had previously expected the economy to shrink 9.5 percent in the year to March, revised its forecast after a shallower-than-expected decline in GDP in the July-September quarter

Press Trust of India December 04, 2020 13:06:14 IST

"The Dark Knight." In preparation for his role as The Joker, Heath Ledger hid away in a motel room for about six weeks. During this extended stay of seclusion, Ledger delved deep into the psychology of the character. He devoted himself to developing The Joker's every tic, namely the voice and that sadistic-sounding laugh.

Mumbai: The Reserve Bank of India (RBI) on Friday left interest rates unchanged for a third straight meeting as inflation stayed stubbornly high, and said the economy was recuperating fast and would return to positive growth in the current quarter itself. The benchmark repurchase rate will be maintained at 4 percent, RBI Governor Shaktikanta Das said. The six-member Monetary Policy Committee (MPC) retained its accommodative stance, signaling its intentions to cut interest rates whenever the situation eases.

A spike in consumer prices forced RBI to pause after cutting rates by 115 basis points this year.

The central bank, which had previously expected the economy to shrink 9.5 percent in the year to March, revised its forecast after a shallower-than-expected decline in the gross domestic product (GDP) in the July-September quarter.

"Valkyrie." Germany has strict laws against displaying the swastika, though artistic displays are specifically exempt. Filmmakers usually use incorrect swastikas to avoid causing public outrage. The producer wanted swastikas for authenticity, so the crew posted warnings around the filming locations. Still, a local resident filed an official complaint with the city, who pressed charges against the owners of some filming sites.

Das said high frequency indicators point to a recovery gaining traction, with double digit growth in passenger vehicles and motorcycle sales, railway freight traffic, and electricity consumption in October.

The GDP, he said, will grow by 0.1 percent in the October-December quarter and by 0.7 percent in the following three months. Overall, the 2020-21 fiscal will end with a (-) 7.5 percent degrowth.

The economy had contracted by a record 23.9 percent in the April-June quarter and by 7.5 percent in the following three months.

"Only Lovers Left Alive." All of the cast members playing vampires wore wigs that were a mix of human, yak, and goat hair, in order to make them look wilder.

The two successive quarters of contraction pushed the economy into a technical recession. This is the first recession since quarterly records started in 1996.

RBI had previously forecast a 5.6 percent contraction in the quarter through December, followed by a return to growth in the three months to March.

Das said inflation continues to be sticky.

Headline retail inflation at 7.6 percent in October was well above the upper end of the central bank's 2-6 percent target band. For H1 2021-22, RBI projected a growth of 21.9 percent to 6.5 percent.

"Into The Wild." The temperature outdoors was at freezing when Emile Hirsch performed the naked back float down the stream.

RBI saw inflation in the fiscal third quarter at 6.8 percent, and easing a bit to 5.8 percent in January-March.

It is projected to be in the range of 5.2 to 4.6 percent in the first half of the 2021-22 fiscal. "Inflation is likely to remain elevated," he said, adding that this constrains the monetary policy at the current juncture from using the space available to act in support of growth.

Stating that RBI was ready to take further measures to ease liquidity, he said the central bank will use various instruments at the appropriate time to ensure ample liquidity is available in the system.

"Into The Woods." At a Q&A session after screening of the film, James Corden recalled an incident during rehearsals in which Meryl Streep jumped on a table and her foot got caught in her costume. She started falling backwards, head first, toward a concrete floor. Both Corden and director Rob Marshall froze in the fear that they were about to witness the death of Meryl Streep. However, a pregnant Emily Blunt stepped in and caught Streep before she hit the floor.

He also announces measures to deepen the corporate bond market and supervisory measures for the shadow banking sector.

RBI raised the limit of contactless card transactions to Rs 5,000 per usage from the current Rs 2,000, with effect from 1 January.

Also, real-time gross settlement systems (RTGS) will be available 24x7 in the next few days, he said.

"The MPC 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," he said.

The movie "Little Miss Sunshine" was partially inspired by a quote from Arnold Schwarzenegger saying: "If there's one thing in this world I despise, it's losers."

SIMILAR ARTICLES: