Mumbai – The Reserve Bank of India (RBI) on Friday maintained the policy repo rate at 6.5% for the 11th consecutive time during its fifth bi-monthly monetary policy review of the current financial year.
Considering the prevailing economic conditions, the RBI revised its GDP growth forecast for the current fiscal year from 7.2% to 6.6%. Additionally, the retail inflation projection for the year was adjusted upward from 4.5% to 4.8%.
RBI Governor Shaktikanta Das announced these decisions after the three-day Monetary Policy Committee (MPC) meeting, which commenced on Wednesday. He stated that the MPC voted to keep the policy repo rate unchanged, with four out of six members supporting the decision, while two advocated for a change.
The committee also decided to maintain its "neutral" stance, allowing flexibility in responding to evolving economic conditions.
The repo rate is the interest rate at which commercial banks borrow funds from the central bank to meet short-term liquidity needs. This rate is a crucial tool for controlling inflation.
The decision to hold the repo rate steady implies that monthly installments (EMIs) on loans such as home and vehicle loans are unlikely to change, offering stability for borrowers.
This marks another step by the RBI in balancing inflation control with economic growth amidst fluctuating global and domestic economic conditions.
