“The decision of MPC to keep the benchmark repo rate unchanged at 4%, is an accommodative stance and is a positive. It will help supply of money in the economy, which is the basis to generate demand.
Also the Reserve Bank of India has taken a determined step towards boosting credit growth by announcing a Rs 1 lakh crore targeted Long-Term Repo Operations (TLTRO) for banks. Lenders will be able to borrow from this window at the policy repo rate and invest in corporate bonds and other debt instruments of various sectors. This focus on liquidity measures will help in revival of activity in specific sectors that have both backward and forward linkages, and will have a multiplier effect on growth. While the Covid situation remains uncertain, the accommodative stance will help the economy stay afloat in FY21 and prepare us for a faster recovery from Q1 FY22 onwards.”
