Sunday, March 03, 2024
  1. You Are At:
  2. News
  3. Business
  4. RBI keeps repo rate unchanged at 6.5% for the fifth time in a row; no hike in home loan rates

RBI keeps repo rate unchanged at 6.5% for the fifth time in a row; no hike in home loan rates

Retail inflation in India though, is in RBI's 2-6 per cent comfort level but is above the ideal 4 per cent scenario.

Nivedita Dash Edited By: Nivedita Dash @Nivedita0503 New Delhi Updated on: December 08, 2023 10:27 IST
RBI Governor Shaktikanta Das
Image Source : PTI RBI Governor Shaktikanta Das

The Reserve Bank of India (RBI) on Friday kept the repo rate unchanged for the fifth time in a row as the monetary policy committee maintained a status quo.

Making the announcement, RBI Governor Shaktikanta Das said, "...The Monetary Policy Committee decided unanimously to keep the policy repo rate unchanged at 6.5%. Consequently, the Standing Deposit Facility rate remains at 6.25% and the Marginal Standing Facility rate and the Bank Rate at 6.75%."

The three-day bi-monthly monetary policy committee (MPC) meeting of the RBI began on Wednesday. The RBI typically conducts six bimonthly meetings in a financial year, where it deliberates interest rates, money supply, inflation outlook, and various macroeconomic indicators. For the fourth straight occasion, the monetary policy committee, through its October review meeting, unanimously decided to keep the policy repo rate unchanged at 6.5 per cent, thus maintaining the status quo. In its past four meetings, it held the repo rate unchanged at 6.5 per cent. The repo rate is the rate of interest at which RBI lends to other banks.

While deliberating the policy statement in October, RBI Governor Shaktikanta Das said the central bank was concerned and it had identified high inflation as a major risk to macro-economic stability and sustainable growth. Das had reiterated that the monetary policy committee is committed to aligning India's headline inflation at 4 per cent level.

Barring the latest pauses, the RBI raised the repo rate by 250 basis points cumulatively to 6.5 per cent since May 2022 in the fight against inflation. Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline. Retail inflation in India continued to ease through October, supported by a relative decline in some of the sub-indexes. The October consumer price index (CPI) came at a four-month low of 4.87 per cent against 5.02 per cent the previous month.


Read all the Breaking News Live on and Get Latest English News & Updates from Business