RBI MPC Meeting June 2024: The repo rate was last changed in February 2023 and then it was increased to 6.5 percent. Since then the rates are stable…
RBI MPC Meeting: The much-awaited Monetary Policy Committee meeting of the RBI ended today before the full budget for the financial year 2024-25. Reserve Bank Governor Shaktikanta Das said after the meeting that the committee has once again decided not to make any change in the main policy rate i.e. repo rate.
Repo rate stable at this level for 16 months
This means that the repo rate is still going to remain stable at 6.5 percent. This is the 8th consecutive meeting of the powerful Monetary Policy Committee of the Reserve Bank, when no change has been made in the repo rate. The Central Bank’s MPC last changed the repo rate in February 2023 and then it was increased to 6.5 percent. That is, the repo rate has been stable at the same level for 16 months.
You will not get the benefit of cheap loan now
RBI Governor Shaktikanta Das’s announcement has disappointed those who were expecting a reduction in interest rates. There is not going to be any change in the burden of EMI of the people due to no change in the repo rate. On the other hand, this announcement is good news for those investors who like to invest money in FD. The continuation of high repo rate means that the benefit of higher interest on FD will continue.
What is repo and reverse repo rate?
Repo rate is the interest rate on the basis of which banks get money from RBI. Due to this, whenever there is a change in the repo rate, the interest rates of personal loan to car loan and home loan change. Due to reduction in repo rate, the interest of the loan decreases, whereas due to increase in repo rate, loans become expensive. Similarly, the rate at which the Reserve Bank gives interest to the banks in return on the money deposited with it is called reverse repo rate.
So many members agree on keeping the repo rate stable
Reserve Bank Governor Shaktikanta Das said after the meeting on Friday – The Monetary Policy Committee has decided to keep the repo rate stable by majority after reviewing the macroeconomic conditions. Out of 6 members of MPC, 4 have decided not to change the repo rate. The committee has decided to keep the repo rate stable at 6.50 percent.
RBI’s concern remains due to inflation
Earlier in the month of April, the first meeting of the Monetary Policy Committee of the Reserve Bank was held during the current financial year. In that meeting also, MPC did not change the repo rate citing inflation. Actually, the Reserve Bank wants to bring retail inflation below 4 percent. Last month, retail inflation came down to an 11-month low, but it is still well above the RBI’s target with 4.83 percent. Inflation of food items is particularly worrying, the rate of which reached a four-month high of 8.7 percent in May.
