Monetary policy was significantly eased from March 2020 onwards owing to the unprecedented Covid-19 pandemic and remained accommodative in 2020, said the Economic Survey 2020-21.
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The repo rate has been cut by 115 bps since March 2020, with 75 bps cut in first Monetary Policy Committee (MPC) meeting in March 2020 and 40 bps cut in second meeting in May 2020.
Also, Systemic liquidity in 2020-21 remained in surplus while RBI undertook various conventional and unconventional measures to manage liquidity situation in the economy.
This year saw improvement in transmission of policy repo rates to deposit and lending rates, as reflected in the decline of 94 bps and 67 bps in Weighted Average Lending Rate on fresh rupee loans and outstanding rupee loans respectively from March 2020 to November 2020.
Similarly, the Weighted Average Domestic Term Deposit Rate declined by 81 bps during the same period.