Thursday, February 8, 2024

No change to EMIs as the RBI maintains the 6.5% repo rate


NEW DELHI: The decision to maintain the repo rate at 6.5 percent made by the Reserve Bank of India's monetary policy committee (MPC) on Thursday is unlikely to have any effect on loan EMI outgo.

This is the 6th time in succession that the RBI has kept the repo rate unaltered at 6.5%. The repo rate is the rate at which the RBI loans to the banks.

The six-part MPC meeting started on Tuesday and its choices were declared by RBI lead representative Shaktikanta Das on Thursday.

Since May 2022, the RBI has raised the repo rate by a combined 250 premise focuses (bps) with an end goal to battle rising expansion. However, due to a slight decrease in inflationary pressures, it has not adjusted the rate since February 2023. Since then, inflation has consistently remained close to its mandated range of 2% to 6%, significantly exceeding its medium-term goal of 4%.

The RBI has been requested that by the public authority keep up with retail expansion, as estimated by the purchaser cost record (CPI), at an objective of 4%, considering a vacillation edge of 2% in one or the other bearing.

It falls upon the money related arrangement panel (MPC) to set the approach repo rate to meet this expansion objective, while additionally thinking about the point of cultivating monetary development.

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