RBI Monetary Policy: The meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) is over. After the meeting, Reserve Bank Governor Shaktikanta Das announced the policy.
The Reserve Bank has once again increased the repo rate. The Reserve Bank (RBI) has now increased the repo rate by 0.25 percent. After which the repo rate has become 6.50 percent. With the decision of RBI, it is certain to take loan and increase EMI. Interest rates have been increased for the 6th time in a row.
“The unprecedented events of the last three years have tested monetary policy across the world,” RBI Governor Shaktikanta Das said. Emerging market economies face a sharp tradeoff between supporting economic activity and controlling inflation while maintaining policy credibility. have to do.” Shaktikanta Das further says in the press conference, “The global economic outlook no longer looks as grim as it did a few months ago, with growth prospects improving in major economies, while inflation is easing, although inflation is still well above target in major economies.”
In the MPC meeting of December 2022, RBI had increased the key policy rate repo by 0.35%. Earlier, the central bank had increased the repo rate by 0.50% for three consecutive times. Overall, in the last five credit policies, the RBI had increased the repo rate by a total of 225 basis points or 2.25 percent.
RBI Governor Shaktikanta Das said, “Inflation is expected to average 5.6% in the fourth quarter of 2023-24.
What is the effect of increasing the repo rate?
- Increasing the repo rate will increase the EMI of your other loans like home and car loans.
- The increase in the repo rate will also affect your savings bank account and FD.
- To control the ever-increasing inflation, the central bank tries to control it by increasing the repo rate. The latest increase in the repo rate should be expected to help keep inflation under control.
What is repo rate?
Repo rate is the rate at which the Reserve Bank of India (RBI) lends to commercial banks and other banks. It is called Reproduction Rate or Repo Rate.