RBI postpones MPC meet on key interest rates

The Reserve Bank of India (RBI) has rescheduled the meeting of its Monetary Policy Committee (MPC) which was to be held from September 29 to October 1.

The new dates will be announced shortly, said the central bank in a brief statement on Monday.

Several experts say the RBI is expected to keep key interest rates on hold until early next year to maintain a delicate balancing act between curbing high inflation and lifting the economy from its worst recession in decades.

While coronavirus infections spread in India at the fastest pace anywhere in the world, there are doubts of a quick economic recovery. The GDP growth fell by 23.9 per cent in the first quarter (April to June) of current financial year (2020-21).

The RBI held its main repo rate at 4 per cent at its last meeting and said it will keep policy accommodative in view of rising inflation and faint signs of economic growth amid gradual lifting of coronavirus (COVID-19) countrywide lockdown.

Repo is the rate at which RBI lends funds to commercial banks when needed. It is a tool that the central bank uses to control inflation. Reverse repo is the rate at which the RBI borrows from banks.

( With inputs from ANI )