The central bank kept it's promise of support and held rates unchanged but altered their growth outlook to reflect a weakening recovery.
Reserve Bank of India has downgraded the GDP outlook for India for the current fiscal year from 10.5% to 9.5%. This downward revision follows a weaker than expected Q4 and subsequent lockdowns in most states in April-May period. The RBI Governor while announcing the policy however did underscore that the impact on economy in the second wave is muted as compared to the first wave as businesses have continued to adapt and keep economic functions running.
RBI though raised their core inflation outlook for the coming month did sound optimistic that a normal monsoon will keep food prices in check. The RBI governor however did sound off concerns on rising commodity prices globally whose impact is not being felt to the full extent due to weak domestic demand.