RBI keeps repo rate at 6.5 percent for sixth consecutive time

Mumbai, 08 February (HS): The Reserve Bank of India (RBI) has maintained the policy repo rate at 6.5 percent for the sixth consecutive time. Keeping the repo rate at 6.5 percent means that there will be no change in the monthly installment (EMI) on various loans including house and vehicle. The growth rate of Gross Domestic Product (GDP) for the next financial year 2024-25 is estimated to be seven percent. However, this is less than the estimate of 7.3 percent for the current financial year 2023-24.

RBI Governor Shaktikanta Das said this while announcing the results of the bi-monthly review meeting of the Monetary Policy Committee (MPC) here on Thursday. Das said in a press conference that the repo rate has been maintained at 6.5 percent. He said that the six-member team of MPC has decided with a 5-1 consensus to maintain the policy interest rate repo rate at 6.5 percent.

In the current financial year 2023-24, retail inflation will average 5.4 percent. He has expressed hope that it will come down to 4.5 percent in the next financial year 2024-25.

Das said that the country’s foreign exchange reserves are at the level of US $ 622.5 billion, which is a satisfactory position to meet foreign obligations. He said the investment cycle is gaining momentum, there are signs of improvement in private sector capital expenditure. The Indian economy is progressing confidently on a strong, sustained growth path.

Repo rate is the policy interest rate at which the Reserve Bank of India lends to commercial banks. At present the repo rate is 6.50 percent.

There are six members in the MPC of the Reserve Bank. This includes external and Reserve Bank officials. RBI Governor Das is joined by Reserve Bank of India official Rajeev Ranjan as executive director, while Michael Debabrata Patra is the deputy governor whereas, Shashank Bhide, Ashima Goyal and Jayant R Verma are external members. It is noteworthy that the Reserve Bank has maintained the repo rate at 6.5 percent for the last one year. RBI last increased the repo rate from 6.25 percent to 6.50 percent in February 2023.