New Delhi: The Reserve Bank of India (RBI) has maintained the repo rate at 6.5% in its latest Monetary Policy Committee (MPC) meeting. This decision marks the ninth consecutive time that the central bank has kept the benchmark interest rate unchanged. Let’s know the details:
Key Decisions:
- Repo Rate Unchanged: The repo rate remains steady at 6.5%. This means that borrowers, including those seeking home and car loans, won’t see any increase in interest rates.
- Marginal Standing Facility (MSF) and Standard Deposit Facility (SDF): Both rates MSF at 6.75% and SDF at 6.25% remain unchanged.
Inflation Outlook:
- Favorable Base Effect: RBI Governor Shaktikanta Das highlighted that headline inflation is expected to soften due to a favorable base effect. However, he cautioned that this trend may reverse in the third quarter.
Expert Predictions:
- No Surprise: Experts had already anticipated that the repo rate would remain unchanged. Bank of Baroda’s Chief Economist, Madan Sabnavis, pointed out that while inflation may numerically decrease in the coming months, it will remain high due to the base effect. Hence, the RBI’s decision to maintain the status quo.
- ICRA’s Stance: ICRA’s Chief Economist, Aditi Nair, emphasized that robust growth in FY 2023-24, coupled with a 4.9% inflation rate in the first quarter of FY 2024-25, supports the case for keeping interest rates stable.
Monetary Policy Statement:
The full monetary policy statement can be viewed live at 10 am on August 8 via RBI’s social media channels and Business Standard’s homepage.
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