• The announcements were aimed at countering the fallout from the ongoing nationwide lockdown to contain the spread of the coronavirus pandemic, which has pushed the economy into a standstill, hurt businesses and landed thousands jobless.

• In his first address to the media after the government detailed the fiscal and monetary stimulus worth Rs 20.97 lakh crore, Mr Das said economic is expected to remain in the negative territory in the current financial year, due to the COVID-19 outbreak.

• While the repo rate was reduced to 4 per cent, the reverse repo rate – the interest rate at which the RBI borrows funds from commercial banks – was lowered to 3.35 per cent from 3.75 per cent.

• The committee decided to continue with its “accommodative” stance of policy, which means the central bank is ready to ease monetary policy further to support the financial system.

• Five members of the Monetary Policy Committee (MPC) voted in favour of rate reduction, RBI Governor Shaktikanta Das said through a video address.

• The RBI extended the term loan moratorium and also relaxed the repayment terms (interest payments) to prevent a cash-squeeze for borrowers.

• The RBI Governor said the combination of fiscal, monetary and administrative measures will create conditions that will enable a gradual economic revival going forward.

• Economists say the transmission of lower interest rates by banks to their customers will be watched closely.

• “The RBI flagged risks of a negative growth print this year, while holding back on a point target. They expect disinflationary forces to dominate, suggest they open for further reduction in cuts,” said DBS Bank economist Radhika Rao.

• In March, the RBI had slashed the repo rate by 75 bps to stimulate growth, and the next month, it unexpectedly lowered the key deposit rate – or reverse repo rate – to 3.75 per cent, in a bid to discourage commercial banks from parking idle funds with it and spur lending.

The Reserve Bank of India (RBI) on Thursday went against majority expectations and kept repo rate unchanged at 5.15 per cent in its fifth bi-monthly policy review of the year.

A large number of economists exuded confidence that RBI’s six-member Monetary Policy Committee (MPC) would lower the key interest rate once again as growth in the second quarter reached a six-year low of 4.5 per cent.

However, the central bank already cut repo rate — at which banks lend from the RBI — five times since January without any improvement in growth.

All six members of the RBI’s MPC voted against the cut but maintained an accommodative stance, allowing it to act whenever necessary.

In what seems to be another setback, the central bank also lowered its GDP growth forecast for the entire year to 5 per cent from 6.1 per cent.

In a statement released after the announcement, RBI said, “GDP growth for Q2 turned out to be significantly lower than projected. Various high-frequency indicators suggest that domestic and external demand conditions have remained weak. Based on the early results, the business expectations index of the Reserve Bank’s industrial outlook survey indicates a marginal pickup in business sentiments in Q4.”

RBI also added that overall sentiments are muted in several key sectors including manufacturing and construction. It expressed concern over contraction in the output of eight core industries as well.