The Reserve Bank of India’s Monetary Policy Committee (MPC) announced today that it will maintain the policy repo rate at 6.5 per cent for the seventh time in a row. The decision was taken following a three-day meeting from April 3 to 5.
Repo Rate: It is the interest rate at which the central bank of a country lends money to commercial banks.
With the repo rate remaining unchanged, it is expected that lending rates will also remain stable. This means that borrowers will likely see no immediate adjustments in their Equated Monthly Instalments (EMIs).
This decision has implications for people with loans, such as home loans. Given that the repo rate remains unchanged, it is expected that things will stay the same for now, making it easier to manage their loans without worrying about sudden hikes.
Advertisement
Announcing the first bi-monthly monetary policy for the current financial year, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) has decided to keep the repo rate unchanged at 6.5 per cent.
Das added that inflation is approaching its goals. Core inflation has consistently dropped over the last nine months, while the fuel component has been in deflation for six straight months, he said.
"As the uncertainties in food prices continue to pose challenges, the MPC remains vigilant to the upside risk to inflation that may derail the path of disinflation," he said, adding that the outlook for agricultural and rural activities appears bright.
Advertisement
The RBI's decision to maintain the lending rate unchanged is viewed as a strategic move to maintain balance. The central bank aims to manage inflation while also fostering economic growth.
The six-member rate-setting panel, voting with a majority of 5:1, opted to maintain the current interest rate stance while keeping a close watch on the withdrawal of accommodative measures.
