RBI Keeps Repo Rate Unchanged At 6.5%
The Reserve Bank of India (RBI) governor Shaktikanta Das announced the Monetary Policy Committee’s (MPC) decision on key interest rates today.
This marks the first RBI MPC announcement in the Financial Year 2024-25 (FY25). The central bank has kept the repo rate unchanged for the last six consecutive MPC meetings. The repo rate currently is at 6.5 per cent. RBI MPC started its three-day meeting on April 3.
RBI monetary policy: What does the MPC do?
The MPC’s task is to keep the country’s retail inflation within four per cent with a margin of two per cent on either side. This committee meets at least four times a year to discuss the direction which the central bank wants to take in the financial year as it aims to strike a balance between sustaining growth and maintaining inflation target. After this assessment, the MPC decides whether to maintain, raise, or lower the repo rate.
RBI monetary policy: What to expect?
The announcement will address key interest rates that you need to look out for including repo rate. You also need to look at Standing Deposit Facility (SDF) rate, Marginal Standing Facility (MSF) rate and monetary policy stance. These terms have been explained in detail here.
RBI monetary policy: What is repo rate?
Repo rate is the rate at which the central bank lends short-term funds to banks. It currently stands at 6.5 per cent and has been unchanged since April 2023. The State Bank of India, in its research report, stated that rate cuts are not likely in the MPC as “strong evidence of emerging economy central bank rate actions are predicated by advanced economy central bank rate actions. India is an exception and the first RBI cut could be in Q3FY25.”
RBI monetary policy: Could global macroeconomic conditions impact RBI’s decision?
The RBI’s policy decision may be influenced by global economic trends as it comes ahead oft he US Federal Reserve decision on rate cut. US Fed is expected to deliver its first cut in June while risks remain for the cut to happen later in the year.
Top things you need to know about RBI MPC
Meeting dates: The MPC started its three-day meeting on April 3 which concludes with the RBI governor’s address.
Date and time: The policy decision will be announced on April 5 by RBI governor Shaktikanta Das at 10 am.
What happens after: A press conference will be held by Shaktikanta Das at noon.
Where to watch: Shaktikanta Das’s speech can be streamed online on RBI’s official YouTube channel and official social media handle on X (formerly Twitter).
What about other FY25 MPC meets: The next MPC meetings have been scheduled for: June 5-7, 2024, August 6-8, 2024, October 7-9, 2024, December 4-6, 2024 and February 5-7, 2025.