Repo Rate: It is the interest rate at which the central bank of a country lends money to commercial banks.
The central bank in India i.e. The Reserve Bank of India (RBI) uses repo rate to regulate liquidity in the economy.
RBI Monetary Policy: In May 2020, the RBI reduced the repo rate by 40 basis points to 4% for the Covid pandemic caused damage across the country, creating a decrease in demand, production reduction, and job losses.
Shaktikanta Das, governor of the Reserve Bank of India (RBI), announced the monetary policy decision today (August 8).
The Monetary Policy Committee (MPC) gathered its third bi-monthly policy meeting on August 6 and August 8.
The RBI kept its primary interest rate constant, as predicted, as the central bank continued its work to consistently cut inflation toward its 4% goal.
For the ninth consecutive policy meeting, the Monetary Policy Committee (MPC) retained the repo rate at 6.50%.
Radhika Rao, senior economist at DBS Bank, stated, “Policy advice maintained that local issues will be given priority, despite an abrupt rise in rate cut price for the US Fed.
With domestic demand circumstances requiring a focus on inflation, we believe the policy rate to remain unchanged for the balance of the year.
In JUNE MPC,The GDP growth expectation for FY25 was increased to 7.2%, up from 7% previously, but the inflation forecast stayed constant at 4.5%.
The Reserve Bank of India (RBI) plans to set up Next MPC meetings on the following dates: October 7-9, December 4-6, and February 5-7, 2025.
