The Reserve Bank of India (RBI) has maintained interest rates for the eighth consecutive time. At the end of the bi-monthly Monetary Policy Committee (MPC) review meeting that began on Wednesday, RBI Governor Shaktikant Das said the repo rate remained unchanged at 4 per cent and the reverse repo rate remained the same at 3.35 per cent.
When the Kovid-1 pandemic epidemic first shook the country, the Reserve Bank last stopped its policy rate on May 22, 2020. To save the economy from the aftershocks of the coronavirus, the central bank has reduced its repo rate by 115 basis points since March 2020.
Meanwhile, India’s service industry expanded for the second month in a row in September, boosting domestic demand and easing the Covid-1 restrictions, forcing companies to hire more staff for the first time in almost a year. The IHS Market Services Purchasing Manager index fell to 56.2 in September from an August 18-month high of 56.7, but remained comfortable above the 50-mark, separating growth from contraction.
Rating agency Moody’s has upgraded India’s rating outlook from its previous “negative” outlook to “stable”. The global rating agency said the economic recovery is underway as activity is slowly increasing and spreading to various sectors. Moody’s downgraded India’s rating from Baa2 to Baa3 last year, observing that it may find it difficult to implement policy to reduce the risk of a permanent period of low growth.
Fitch Ratings, on the other hand, downgraded India’s GDP forecast for the current fiscal to 8. per cent from its previous estimate of 10 per cent in June, mainly due to the second wave of the coronavirus epidemic.