RBI did not change the repo rate on October 9. Central Bank Governor Shaktikanta Das presented the monetary policy results at 10 am. RBI’s monetary policy committee meeting began on October 7.
In this meeting, it was decided to maintain the repo rate at 6.5 percent. The decision of the central bank’s monetary policy committee is as per the expectations. Experts had predicted no change in the repo rate in the October monetary policy committee meeting. This is the 10th consecutive time that RBI has not made any change in the repo rate.
RBI maintains focus on inflation
Last month, the US central bank Federal Reserve reduced the interest rate by 50 basis points. This increased the hope of reduction in interest rates in other countries including India. But, RBI had made it clear in its monetary policy in August that its decision to reduce the interest rate will depend on the conditions of the domestic economy. The central bank has maintained its focus on controlling retail inflation for the last several months. Its results are visible. Retail inflation has come close to RBI’s target of 4 percent.
RBI may reduce repo rate in December
Experts say that if retail inflation remains under control in September and October, the central bank may decide to reduce interest rates in December. RBI reviews its monetary policy every two months. After October, its next monetary policy will come in December. There may be a reduction in the repo rate in this. Some experts believe that instead of reducing the repo rate by 50 basis points at once, RBI will reduce it by 25-25 basis points in two times.
The central bank also keeps an eye on the growth of the economy
In the first quarter of this financial year, GDP growth has been less than RBI’s estimate. Experts say that on one hand there is pressure on RBI to control retail inflation and on the other hand there is concern about maintaining the economic growth rate. Indian economy has remained the fastest growing economy in the world for the last several years. After the end of the Covid epidemic, the Indian economy has shown tremendous growth. Experts say that the policies of the government and RBI have a big role in this. RBI’s monetary policy has been praised all over the world.
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