For the fourth consecutive time, RBI has not made any change in interest rates. It will remain as it is at 6.5%. This means that your EMI will not increase. RBI Governor Shaktikanta Das informed about the decisions of the Monetary Policy Committee on Friday. RBI had last increased the repo rate in February 2023. A monetary policy meeting takes place every two months.
The RBI Governor said that all the MPC members were in favor of keeping the rates stable. The Governor said that the fight against inflation is not over yet and the RBI has set a target of keeping inflation not between 2-6% but at 4%.
Announcing the results of the MPC meeting, RBI Governor Das said that inflation will moderate in the near future due to lower prices of vegetables and a reduction in the price of LPG cylinders. RBI Governor said that inflation may decline in September. The high inflation rate is a threat to economic growth. The effect of an increase in the repo rate is visible in the economy.
RBI also released inflation and GDP estimates
The RBI Governor has also released inflation estimates and GDP estimates. The inflation projection for FY24 has been retained at 5.4%. In the last meeting, it was increased from 5.1% to 5.4%. RBI Governor said that inflation is expected to come down in September.
Real GDP growth estimate for FY24 has been maintained at 6.5%. At the same time, the real GDP estimate for the first quarter of FY25 has also been maintained at 6.6%. RBI Governor said that there is a slowdown in the global economy due to a geopolitical crisis.
After the Corona epidemic, the Reserve Bank continuously reduced the repo rate to support economic growth. At that time the main policy interest rate was reduced to 4 percent. The repo rate remained at 4 percent for a long time. However, later the Reserve Bank was forced to increase the repo rate after inflation went out of control and all the central banks including the US Central Bank Federal Reserve increased the interest rates.